Nvidia Can Still Grow Despite 220% Rally
The stock has traded in a $100 range for about five months!
With profit estimates on the rise, Nvidia is looking cheaper.
Tweet on Nvidia shares
Nvidia Can Still Grow Despite 220% Rally!
The stock has traded in the $100 range for about five months. With profit estimates on the rise, Nvidia is looking cheaper, via Bloomberg#nvidia #nvda #chips #ai pic.twitter.com/UXAcCCYh4b
— The_Journalbiz (@the_journalbiz) November 10, 2023
Bloomberg chart
Nvidia bulls are starting to throw around an adjective rarely used for a stock that’s more than tripled in less than a year: cheap.
That’s the view of investors like Alec Young, chief investment strategist at Mapsignals, who have watched Nvidia shares trade in a $100 range since the summer, meandering after rallying to near $500 in August.
But with profit estimates still rising, Nvidia’s price relative to expected earnings has fallen to the lowest since mid-2022.
- The stock has traded in a $100 range for about five months
- With profit estimates on the rise, Nvidia is looking cheaper
- Nvidia shares are up as much as 2.1% Friday, on track to notch a second consecutive weekly gain.
Nvidia’s valuation is based on profits that have yet to materialize in an industry that even bulls acknowledge is highly cyclical. On a trailing basis, Nvidia is priced around 35 times sales, making it the most expensive stock in the S&P 500 by far. Second-placed Cadence Design is half as as expensive, and the benchmark average is 2.4 times.
“The stock is actually very cheap,” said Young, adding that its price-to-earnings ratio is less than the company’s estimated growth rate, which is uncommon.
