Opinions
Andrew Pyle
NVIDIA Corporation
NVDA-Q
WATCH
May 28, 2025
Stock price when the opinion was issued
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Premium contentNVDA has had some setbacks with AI competition and trade war uncertainty, but recently reported earnings showed a 69% increase in revenues --including a 73% increase in data center revenues. It trades at 46x earnings and supports a ROE over 100%. We like that cash reserves are growing, while shares are aggressively bought back and debt is retired. We recommend setting a stop-loss at $106, looking to achieve $172 -- upside potential of 18%. Yield 0.03%
(Analysts’ price target is $172.22)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.
Premium contentPremium contentProbably a good place to write some calls against it, especially as average analyst price target is ~$175. Over next few days, analysts will probably up price targets due to H20 chips being allowed to China. It'll be king of the hill for at least 18 more months. Should definitely be in your top 5.
(Analysts’ price target is $175.00)
Won't easily be toppled from the throne on which it finds itself. Every time someone thinks they can do that, it comes out with a new version of the chip that's even better. Definitely the bellwether on demand going forward. Any sign of negativity in the comments tonight won't play well for any name in this arena.
He has a coin to flip on what the results are going to be. The interesting thing about today's report is that he feels the bar's being set a bit lower than in previous quarters. We're now in the thick of uncertainty about where the economy is going over the next 6 months after the impact of Trump's policies. We've heard cautionary whispers coming out, so analysts may be looking for some negativity in the comments tonight.
If results aren't as bad as we think, stock could see a nice little pop. Stock's consolidated after a nice rebound from April. It comes down to where's the market, where's the bar been truly set, and what does the CEO say?
Personally, he thinks the street's prepared for some bad news tonight. If it gets that, but nothing worse, it doesn't mean the market will crater on this stock. There will be nagging concerns: that we've priced too much into the stock, we've priced in too much demand, what's the competition going forward, are there viable and cheaper options coming out of other countries like China? If so, investors will be prepared to pull back. But it's not over yet for the stock; it's still the market leader and a solid company going forward.