Stock price when the opinion was issued
One of the things his team's looking at right now is that it seems some of the regulations surrounding the semiconductor industry will be reduced (specifically China, but other countries as well). That could mean an expanded market for the semi manufacturing equipment companies, such as KLAC. AVGO has also been a strong performer, and he owns some NVDA. Those two names have strong relative price performance, are economically sensitive, cyclical, and have pricing power.
Considers the US restrictions as short-term obstacles. Stock's starting to rebound quite nicely. The leader today in AI computing, and for the foreseeable future. Strong global thirst and demand for AI infrastructure. Unmatched advantages compared to other names in the space. Data centres are driving growth. Recent earnings beat.
AI adoption is still in very early stages. Still trading at 1x PEG ratio. Earnings growth is not reflected in the valuation. Sees EPS at 33% going forward. Yield is 0.03%.
Used to make 75% gross margins, but those have jumped to 90%. If it goes back to historic gross margins, even if sales continue, you'll see a huge degradation in profit. Sweet spot in terms of demand. Market thinks it can do no wrong. Worries that demand will abate or just normalize. Good news is baked in. Watch your position size.
They report Tuesday. Expectations are high. He expects 100% or more in revenue and 130% in earnings. It's entirely possible that they report 132% and not 137% and the market responds by slashing 10% of the share price. NVDA is highly sensitive in the short term, but NVDA has reported 6 straight quarters of sales and earnings beats and raised guidance every time. markets have been waiting for this company to have a misstep, so if you've been waiting for this the past 6 quarters, it has not been fun seeing shares go higher. NVDA is entering the report 9% off its highs and as much as 27% recently. The stakes are high for the overall market. Their big customers--Microsoft and Meta--none of them in their conference calls announced they were cutting AI chip spending. None. They are the ones to listen to. He wouldn't buy NVDA now, though.