NVIDIA Corporation (NVDA)

Got stopped out around $110 in July as the semis rolled over. If he loves a company, and the technical picture gets repaired, he doesn't mind paying a higher price to re-enter. He got back in at $114. Undisputed leader in the sector. Technical setup is pretty good. Earnings are due in 14 days; he's holding till then, and hopes it doesn't disappoint. Seems that demand is exceedingly strong, pricing looks good. Blackwell problems seem to have faded.

Worries a bit about the sector; if you take AVGO and NVDA out, it's been one of the worst-performing sectors since July.

Is driven by strong demand in AI and are expanding their product line there. Gross margins are projected to widen to 74% through 2027, given rising volumes in high-margin data centres and pricing power. It replaced Intel in the Dow. The street targets $150, or modest 8% upside. It's had a huge run-up this year. Also, the PE is concerning.

A momentum stock and the PE ratio is compelling. Four companies comprise 46% of their revenues, megatech companies preparing for an AI future and spending a lot. His concern is, what happens when these companies feel they've ordered enough chips? The chip business is very boom and bust. NVDA will go higher, but he can't time the top. Can be treacherous. Watch the budgets of their biggest customers.

Like Taiwan Semi-Conductors it consolidated and then broke out. It is a healthy chart so if it pulls back, buy.
Note: The caller wanted to know whether it is better to buy it on the NASDAQ or the ADR version on the TSX. He has no preference but feels that the U.S. dollar probably has upside.

She added more. Is confident. The stock is breaking out now. Next week, megatechs like Microsoft and Apple, will report on their AI initiatives. All roads lead to NVDA who will enjoy ongoing strong demand for their AI chips. When this has sold down, she closed her call positions as a way to play volatility.

How much are expectations already built into the stock? In the past year, it has grown its EPS by 415% and sales by 195%. Investors have gotten used to this eye-popping growth, so he can't understand where future growth will come from. We know there's a global push to use AI, so who's left? It's unlikely past huge gains will happen again, though modest gains can still occur.

Consider seasonality: there will be money managers playing catch up by throwing money at names like this. So, NVDA is likely to go higher along with the market.

There's risk, but short term, and is fine long term. Now, the company is in the sweet spot--it can't meet customer demand. The CEO is smart and will deliver on the quarter.

Last time it reported, actually got all the way down to $95 a couple of days later. One of his largest positions. 12-month price target of $149.85. If it got above $143, he'd probably write some calls. The new Blackwell chip is completely sold out all through 2025, and no one else has come out with a better widget.

It's the darling of the tech arena right now. Don't go all in. Buy here around $139, and try for $125, $115, and $105. A gift if you could ever get it under $100. If it went under $90, get out of the way.

All paths lead back to NVDA: the power centres and grid. Have great free cash flow. It's hard to fight this stock, that it's gone up too much. Still is a great opportunity.

Key takeaway is that this chart continues to work. Long-term uptrend, with no signs that it's broken down. But we are seeing early signs that this big thrust upward we've seen is stalling.

Though the rally is broadening, tech must participate for the rally to go higher though doesn't have to lead. In the last 3 months, NVDA's chart is forming a bullish consolidation pattern as the 13-, 26- and 40-month moving averages converge. If it breaks above its June high, NVDA can break out. it has support under $120. If it breaks above $140.76, it can rise to $177.

Leader. Just when you think it's getting expensive on a PE basis, the earnings go up. Sees pretty strong earnings growth at over 40% over next few years. 39-40x PE, which is not expensive given the growth. Remember that the semi industry is highly cyclical. Great times now, but the tough times will eventually show up.

Be careful at $140, as that's where a recent top was. As well, over the years he's noticed that the time to be careful is when far too many people are interested in a stock. Might be priced for perfection.