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Nvidia Premium Analysis

We have a few years before Nvidia will show the market it’s true earnings potential. When a thesis is not reflected in the revenue segments yet, there are typically lower entry points and ongoing volatility. You’ll see in the technical analysis that although I could not be more bullish on this stock long-term, there is weakness in the semiconductor sector and we hope this translates to a lower entry point for our readers.   

The market is also in a fierce debate between AMD, Intel, and Nvidia and is also distracted by other chips, such as Micron and NXP. In my analysis, I look for growth. How big is the market relative to how big the company is now?

You can ignore Nvidia’s gaming revenue and other segments for the main trajectory that we are focused on. Gaming is great for stability and earnings reports, but the growth will not be from gaming (a market where Nvidia is already a mature, market leader). I’m also not focused on PC sales or the CPU-powered cloud, as the first is not a growth market and the second is not the piece in the cloud stack that will accelerate future technologies. 

I’ve written at length about the Mellanox acquisition and it’s a great reference for Nvidia’s long-term strategy. In this report, I’d like to break down what the GPU-powered cloud is capable of and why it’s important to differentiate Nvidia’s strategy from the competitors (and some competitors to keep an eye on).

Nvidia-Premium-Analysis-1

Published inFundamental AnalysisStock Analysis PDFs

6 Comments

  1. Russell H Meyer Russell H Meyer

    would you rather with these two AI plays AYX or SPLK. Huang from NVDA well on way to rock star status. BK and Ridley fine analysis here

  2. Harley Harley

    This article was very informative Beth. It tells me that I should just put my current NVDA holdings in a lockbox for 10 yrs., which I am prepared to do and then add on any future significant pullbacks. I am currently LONG on NVDA. Blended, I am in at $146.68/share with entry points as low as $135.42/share from the December ’18 pullback and as high as $266.61 from June ’18. Overall, I am currently up 23% since my initial NVDA buy in March ’18. I missed the hard bottom later in Dec. ’18 when I was adding on the way down. I would certainly add significantly this time if it gets back down in the $125/share territory.

  3. Brett Johnson Brett Johnson

    Does anyone know if there are hyperlinks in the Stock Analysis PDFs? I can’t get them to work. It looks like there are as there are frequently terms highlighted in orange and underlined, like the first sentence on page 9, “In November of 2018, I wrote about Nvidia’s developer ecosystem as a primary moat. ” But I’m not able to follow any links anywhere. I’ve tried switching between the hand and the arrow on Adobe Reader. If they aren’t links I will quit trying. But if they are links, I’d like to know, so that I can keep trying.
    Thanks!

  4. Oluwaseyi Lapite Oluwaseyi Lapite

    Hi Beth,
    Arent amazon and google also positioned well for AI? Im just wondering why they are not on your top stocks list.

  5. Phillip Davis Phillip Davis

    i am not able to interpret all the graphs you have, but i merely note the stock and read if you like it long term or not. I sort of do the long term thing buying shares here and there and i do not buy and sell much. I did make a couple of moves by selling MU since they had some chip trouble. I enjoy your site and use it to try and keep up with what is happening in the tech world. Thanks for keeping us abreast as things change for the general public has little or no knowledge of it until it is too late. Do you recommend selling a stock if things look bleak in the short term?

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