NVDA - Nvidia Shows Why Generative AI Is Real - But Near-Term Correction Likely

2024-06-15 10:00:00 ET

Summary

• Nvidia Corporation has recorded an impressive rally of +35.2% after the double beat FQ1 '25 results, promising FQ2 '25 guidance, and the long awaited 10-for-1 stock split.
• With generative AI driving robust sales in both infrastructure and SaaS layers, Nvidia remains well positioned to generate profitable growth and retain leading market share.
• Then again, potential redundancy/ bullwhip effect, expensive ASPs/ intensified in-house AI chip developments, and tougher YoY comparisons may lead to its near-term correction.
• This is especially since Nvidia is currently riding a new high from the recently completed stock split, as many insiders also unlocked great gains in Q2 '24.
• However, we do not believe in timing the market for Nvidia Corporation, with the robust growth prospects warranting a Buy and Hold status in every growth oriented investor's portfolio.

We previously covered Nvidia Corporation (NASDAQ: NVDA ) in April 2024, discussing the uncertainty baked into its stock valuations and prices as the market awaited its FQ1 '25 earnings results.

As the market reeled from the prolonged inflationary pain, we had recommended investors to buy the pullback then, due to the robust long-term capital appreciation prospects as the stock remained well-supported in the $620s (or post split $62)....

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