CA - Nvidia: Swimming In Catalysts
2024-07-01 06:39:32 ET
Summary
- Many people question the duration of Nvidia’s renewed rally this year, although fundamentals seem to support it.
- There are a handful of catalysts, which could drive further upside, making me stick to my Strong Buy recommendation for shares.
- Although valuation multiples reached somewhat stressed levels, continued upward EPS revisions should aid multiple compression without significant correction needed in price.
Introduction and Investment thesis
Since my first article on Nvidia ( NVDA ) here on SA at the beginning of this year ( Nvidia: Diving Deep Into Its Technological Supremacy ) the company and its stock have gone through several changes. First, the company proved to investors that demand for its AI accelerators is real and lasting, which resulted in a significantly increasing valuation multiple. That time I stated that a 100% increase in share price is my base case scenario for 2024, now we’re already at +142%.
In my next article ( Nvidia Q4: This is just the beginning ) on the company covering FY24 Q4 earnings I’ve made the following conclusion: “The recent earnings print and some other important developments since then have confirmed my thesis, with my bull-case valuation scenario slowly turning into my base-case one.” My bull case at the beginning of 2024 called for a share price of $198, which is still 60% from current levels, but I am increasingly convinced that it is coming within reach. Based on my current analysis, my base-case scenario calls for a $170 share price for the end of 2024 with risks skewed to the upside....
Nvidia: Swimming In Catalysts