- Nvidia’s stock has declined despite a double beat in Q4 earnings, with smaller EPS surprises and disappointing guidance indicating potential future earnings growth is already priced in.
- Concerns arise from Nvidia’s poor conversion of earnings into cash flows, with unusual growth in accounts receivable and inventory.
- Trade restrictions and tariffs, particularly from the Trump administration, pose significant headwinds, potentially impacting Nvidia’s pricing and demand from major clients.
- Other headwinds include performance issues with the Blackwell GPUs and AI chips and fading hype around GenAI.
- Technical analysis shows bearish signals, including a potential death-cross pattern, suggesting an unfavorable risk-reward scenario for Nvidia’s stock in the near term.
Brief/Overview
Nvidia (NASDAQ:NVDA) has been a darling of the market for nearly 2 years, since generative AI became mainstream. The stock has soared over 1000% since its lows in late 2022. I am Shubhm Thakkar, an MBA student at the Indian Institute of Management—Indore. I cleared the CFA Level 1 examination that was held in May 2023 and the CFA Level 2 conducted in November 2024. IIM Indore consistently ranks in the Financial Times Top 100 Schools for MBA/ MiM.I have experience publishing on Seeking Alpha as part of my internship at Que Capital, which was a subsidiary of AlmaStreet Capital LLC—an entity that previously published on this platform. At AlmaStreet, I followed a GARP Approach – Growth At a Reasonable Price. I intend to use the GARP approach and a Value Investing approach to write my reports on Stocks and ETFs, varying depending on the industry that the stock is a part of and the stage of the business cycle.
