Nvidia: A Golden Buying Opportunity

Summary
  • Nvidia Corporation’s leadership in AI and groundbreaking innovations, coupled with strong R&D spending, underscore its expanding strategic moat against AMD and Intel.
  • The company’s stellar financial performance, with a 66% EBITDA margin and $57 billion TTM free cash flow, highlights its massive innovation spending capacity.
  • Nvidia’s valuation is compelling with a 30% potential upside, supported by a conservative 6% perpetual growth rate, making it a golden buying opportunity.
  • Potential risks include supply chain issues, U.S.-China trade tensions, and geopolitical risks related to Taiwan Semiconductor, but the overall outlook remains bullish.

My thesis

Nvidia Corporation (NASDAQ:NVDA) has notably outperformed the S&P 500 Index (SP500) since my October 2024 thesis, which was not just a coincidence. The company remains at the forefront of the AI revolution. As an investor who started my path five years ago with my own capital, I represent a blend of hands on experience and academic background in corporate finance. Due to my relatively young age I thrive on discovering long-duration growth opportunities and actively seek out opportunities that align with my risk-taker mindset. In addition to my appetite for growth, I also understand the importance of balancing the portfolio with low-volatility dividend-playing names to be a well-rounded investor. In my analysis I prefer to rely on fundamentals with the business and strategic perspectives the most important in my opinion. As a person with the financial background I also pay attention on a company’s financial performance and how intrinsic value of the stock looks compared to its price in real life. This does not mean that I am seeking deep discounts, but what I am looking is high-quality names with reasonable valuations. My experience as an investor taught me that if something is excessively cheap there are potentially numerous reasons for it and it is better to stay away from deep discounts. I invite readers to subscribe and follow my analysis because I am focusing on high-quality names, which does not necessarily mean only well-known companies but also potential new stars capable of delivering exponential share price growth over the long distance.

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