Nvidia’s Q2: I See Limited Upside Post Earnings

Summary:

  • I don’t believe that Nvidia’s bottom line or revenue will be significantly impacted by the GB200 production delays that many are discussing right before the earnings report.
  • Today’s 2-3% premium over the management guidance seems minimal to me, providing a significant chance of surpassing the consensus again in Q2 FY2025.
  • Positioning in tech stocks has fallen further recently. I think this also creates a favorable environment for Nvidia stock to rise even further if it beats again.
  • However, I’m concerned about the company’s valuation: Even assuming a positive scenario for future business growth, I believe Nvidia is overvalued by 12-29%.
  • I’ve decided to raise my rating to “Hold,” despite being skeptical about any upside from the current price (I believe the stock has limited potential for further gains). Any massive spike from here would result in a “Sell” rating.

Orange nVidia logo on ballon in an urban setting

David Tran

Intro & Thesis

I want to make a disclaimer right at the outset: I’ve long been skeptical about how high Nvidia Corporation (NASDAQ:NVDA) stock could go. Unfortunately for my coverage history – and fortunately for buyers


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


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