BING-JHEN HONG
- Previously, I downgraded Nvidia Corporation stock to “Hold” due to stretched valuation, but after a 22% price drop and strong Q2 earnings, I upgrade it to “Buy” again.
- Despite high volatility and competition, Nvidia’s AI-driven growth, with a 122% YoY revenue growth, solidifies its position as the top AI player.
- Nvidia’s aggressive product cycle and strong CAPEX spending by major tech companies ensure continued dominance in AI GPU innovation despite minor setbacks.
- With a 12M forward P/E of 32x and a PEG ratio of 0.4, Nvidia’s stock appears undervalued, presenting a compelling buying opportunity.
- If Nvidia’s stock falls below $100, I will continue buying more shares.
I wrote an article on NVIDIA Corporation (NASDAQ:NVDA) just a few months back, downgrading the stock to a “Hold” as the price has been hovering near its all-time high of $140.
In my view, the price action has gotten ahead of the underlying fundamentals, particularly as growth slows due to the law of large numbers, not vice versa.
The downgrade has proven to be timely, with the stock down 22% since my previous coverage, with the broader market (SP500) remaining mostly unchanged.
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