๐จ NVIDIA AT $160? IN MY VIEW, THE MARKET IS OVERREACTING! ๐ $NVDA
While the media focuses on the controversy surrounding Jensen Huang, investors are panicking and NVIDIA shares are facing heavy selling pressure, I see something completely different. One of the most interesting buying opportunities in the market.
I may be wrong, but in my opinion this is a typical example of a situation where negative sentiment and short-term noise overshadow the company's real fundamentals.
Let's look at the figures from the latest reported quarter:
๐ Revenue of 96,2 billion USD, up 106 % year over year.
๐ฐ Free cash flow of approximately 21,3 billion USD in a single quarter.
๐ Gross margin of 75 %.
๐ Data Center segment revenue grew 117 % year over year.
๐ต Revenue guidance for the next quarter is approximately 108 billion USD.
We're talking about a company that generates enormous amounts of cash, has an exceptionally strong position in AI infrastructure, and continues to post an extreme growth rate.
And its shares are now trading at around 160 USD.
Using some estimates of future earnings, we get a forward P/E of around 12,5. Of course, it depends on which fiscal year and which expected earnings we use. Whether those estimates are achieved is the biggest question.
But has the value of the entire business really changed just because a controversy involving the CEO emerged?
Jensen Huang is undoubtedly an exceptional leader, and his potential departure would pose a risk. However, NVIDIA is not just Jensen Huang.
It's an entire technology ecosystem, CUDA, product infrastructure, thousands of engineers, customer relationships, and an enormous competitive advantage built over decades.
Moreover, no departure has been officially confirmed so far. The company's board announced an investigation, but also expressed confidence in Huang.
I'm not underestimating the risks. A CEO's departure, geopolitics, competition, or a possible slowdown in AI investment are not insignificant problems.
Even so, I think the market is currently overreacting given what we know today about the company's fundamental performance.
Could NVIDIA fall to 140 USD? Of course. To 120 USD? That's possible too.
But as long as the company continues to generate enormous cash flow, increase earnings, and maintain its technological lead, a lower price represents an even more interesting opportunity to me.
I'm investing with a horizon of several years, not several days.
And I have a feeling that three to five years from now, we may not even remember today's media controversy. The company's results and its ability to generate cash will continue to determine the value of its shares.
In my view, NVIDIA at around 160 USD is clearly an interesting buy. Personally, I see this sell-off as an opportunity, not a reason to panic.
Of course, only if my fundamental investment thesis plays out.
๐ฌ What do you think? Is the current NVIDIA sell-off justified, or is the market once again offering a quality company at a particularly attractive price?
This is my personal investment opinion, not an investment recommendation.