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what's going on with Nvidia stock they're reporting earnings this Wednesday after closing bell and a lot of people are wondering what should I do with Nvidia stock should I sell before earnings I don't think many people are probably buying it here after this epic run but I'm going to give you an earnings preview here and some thoughts about the stock and just what I'm going to do with the stock personally I've been long on this stock since 2018 it's been my highest conviction AI stock since I started this Channel and it is my top holding in my primary tax bill brokerage so I want to share my thoughts with you guys so in case you just woke up from a coma nvidia's been flying off of AI news and AI hype stock is up 118.75 year to date over the past year it's up 85.31 percent five year it's up 402.47 now check this out 52 week low 108 dollars and 13 cents 52 week high just recently here 318-28 trading today at 3 13 14.
now on this channel I was pounding the table 150 or less by Nvidia and it kept going lower and I got lots of trolls and haters saying the stock was going to go to fifty dollars the AI machine turned on institutional investors started to get very bullish on it lots of news started to unfold and the stock just ran so this is one that you could say is pretty close to parabolic if not parabolic you're looking at a 775 billion dollar market cap so by comparison meta platforms 642 billion dollar market cap so Nvidia is worth more than meta at this point at the beginning of the year I did a video your next trillion dollar companies and videos on that list at the rate it's going it's going to be a trillion dollars by next year so let's take a look at this look at the valuation what the earnings expectations are and talk about what could happen to the stock if it misses so Wednesday May 24th Nvidia is going to report after closing bell from its October 2022 lower the stock has nearly tripled it's tripled from its October 2022 low so you're talking about a 300 gain in a little over a half a year the consensus sell side rating on the stock remains a buy and I've seen analysts come out raise their price targets 350 you know how that game works when the stock was 108 dollars you know the analysts are coming out and cutting the the price Target saying it's going to go to 80.
then when it goes to 300 let's raise our Target of 350 to justify it and those targets are going to run stocks both directions and we generally don't follow them what we do look at Price targets for is just sentiment of what's going on with the market some consensus EPS estimate is 91 cents Revenue estimates 6.52 billion dollars Nvidia has beaten EPS estimates in six of the past eight quarters Rising above Revenue expectations and a hundred percent of those reports now if you're familiar with RSI relative strength index that's a scale of zero to 100 anytime you get 70 or higher it's really overbought 30 or less generally oversold and it doesn't necessarily mean it's a buyer or sell or anything like that but oftentimes when that RSI gets above 70 means the stock is probably going to consolidate at some point soon but it can go for much higher and much longer so right now the RSI is 69.33 the stock was overbought and it sold off from 318 to 313 basically so if you remember Q4 FY 23 most recent quarter Nvidia sawed sales and gaming declined 46 so 1.83 billion dollars as sales of desktops laptops of course cool so you had the pandemic everybody is staying at home they're buying machines they're upgrading their PCS and devices and then you're going to have kind of the back end of that where it's a cycle where it slows down it's going to take some time before people start upgrading again and a big part of this came down to supply chain issues what happens is basically you're going to stockpile and there's a shortage it's hard to get something so you're going to order more you're going to stockpile and it's saying here PC vendors could potentially work through existing inventory they built up previously impacting Nvidia that said their Data Center business which is now their single largest target market is 60 of Revenue in most recent quarter and of course AI is going to be data center focused essentially helping with those large language models and on top of that Nvidia is also doing the AI as a service so they're really going from Hardware to more software and they're going to balance that out when you look at the total addressable market for NVIDIA it's 600 billion dollars The Tam for AI 300 billion of that is hardware and 300 billion of that software and it's really just getting started so we did a video earlier in the year when the stock was much lower saying that AI Nvidia really is the king of AI so you can see it talks about some of that here Nvidia chips are generally perceived to be more advanced and more capable than Rivals when it comes to AI related workloads of course AMD and others are starting to get more and more into this as well and I'm bullish on AMD and several other names as well the company has been looking to develop an ecosystem of sorts around its AI tools and this is the differentiator because AMD or another competitor could come out and make Hardware that competes with Nvidia but Nvidia has built this ecosystem which is really hard to replicate so it has its own programming languages software and more again that AI as a service model helping the company to better lock in customers it's more sticky over for Q4 2023 the company saw sales and the data market grow by 11 year over year so lackluster but still growing to 3.62 billion dollars and the company has indicated that it was likely to see strong sequential growth over Q2 so that could be a surprise of The Upside so this article is saying is NVIDIA a buy ahead of earnings and I'm going to do some more analysis on this myself and show you a chart here later so stay tuned but this is saying 63x forward earnings and 23x sales competition the AR Market could mount with traditional Rivals such as Intel and AMD potentially inventing to catch up in the space Also Tech players like Google are doubling down on Am Machine learning related silicon but you're also seeing a lot of these vendors make a lot of their own chips now too and there's there's a lot going on in this space so this article is showing Nvidia stock price valued at 178 dollars a share so that's 35 below where it's trading today in case you're curious where they got that number it's right here so it's trading at 313 dollars and the valuation per share on this is 178 30.
so according to this as of the stock price right now implied downside negative 43 I'm gonna share this too really quick because I thought it was comical this article says that their long SMH but never owned Nvidia directly so they don't have a dog in the fight oops here's another article Nvidia expected to beat earnings estimates can the stock move higher I think most people watch this are going to say no the stock can't go higher it's going to sell off right I'll tell you my thoughts here in a couple minutes so Nvidia is expected to deliver a year-over-year decline in earnings on Lower Revenue so the bar is pretty low here so we talked about the earnings per share the expectation is 92 cents look at this represents a year over year change of negative 32.4 percent can you recall in your investing career where a company is going to report negative 32 percent year over year and the stock being up over a hundred percent in a short amount of time 300 from the bottom this run for NVIDIA has been it's been historic it's been an epic run so next I'm going to look at valuation for provide some thoughts and then a chart before I do that by checking ou over 40 000 subscribers e video is useful drop a like and a comment I appreciate you all right let's check out Fidelity really quick so Nvidia right now 313.34 cents according to this p e ratio 179.53 and I'm going to give you some more information on this so hold on so again 52-week range 108 13 to 3 18 28.
this is from October 13th to May 18th and this my friends is what you call a v-shaped recovery this was November of 2021 basically 335 dollars I think I got up over 340 for a little while dropped all the way down to that 108 and now back in that range at about 315 dollars a share now what I think is interesting is a short interest is only one point three seven percent so the Market's telling you that this is a train that most people do not want to get in front of so Mega cap 773 billion dollars price to sales ratio 28.76 Price to Book 34.88 PEG ratio you usually want this one or less you know sometimes expensive stocks are two and three this is 8.48 now with that said this according to Fidelity PE this year's estimate says 68.1 and next year's estimate says 50.9 so this is where it can get a little bit challenging you're coming off a pretty easy comps for NVIDIA so what happens when Nvidia starts beating those numbers the thing about Wall Street is they always want to see you beating comps you know quarter over quarter year over year and it's why stocks like Zoom video just can't recover because the comps are impossible and it just can't get back into that phase you look at something like Nvidia and you could see a year from now them on paper looking like they're absolutely crushing it but the bar is really low so it's easy to beat those comps now on the channel we do a lot of videos covering best stocks to buy now and Nvidia at 300 plus wouldn't be something that categorized as a buy now I would definitely wait for earnings I'm going to show you a chart here though and and share where I think the stock could go and what I would do if I own the stock today and of course you guys know that I own the stock it's my top holding every single Wednesday we do chart day and patreon Discord if you see orange that's a previous chart day if you see yellow it's today's chart day there's no yellow because I'm just going to tell you what I see so you can see this massive run up on Nvidia and we talked about this we said that it was it was gonna go higher part of wealth has been very bullish in the stock 150 or less and we were really strong in this pound on the table when it got down to that 125 you know under 115 sand DCA we said if it got really ugly It Go 103 105 it didn't quite get there it got to 108 and you can see it bounced from 108 to 187 then pull back back to 138 and then it just ripped from 130 eight so this right here is December of 2022 and it really came into 2023 with the bar pretty low and then AI started getting pumped left and right and it just rocketed from there now if you look at this this is Fibonacci retracement generally you want to be buying down here and down here and selling up here in the red it's way past everything it's blown through all the resistance these are fibonaccis you've got resistance and support blown past the R3 we said that the stock you know would go to 285 and potentially 315 and it's gotten right there so this is my top holding I've owned it since the 30s I think my cost basis is in the high 30s I personally am not selling any Nvidia here because most of what I own is actually house shares I've trimmed it in the past and I've had it since 2018 in several different accounts I think the main thing is why you bought the stock in the first place now one of my top 15 investing rules is never be afraid to take profits or to trim and I'm not saying you have to liquidate but you can trim 10 15 of the gains sell some of your cost basis and take that cash I can't tell you what to do with your money I'm not a financial advisor but it's not a bad idea to trim if you're happy with the profits you made so in other words say you bought the stock at 150 and your idea was if I double on this stock in five years I'll be Satisfied well if you doubled on the stock in six months there's no reason you couldn't take some profits on that now when I sell of course I've got taxes to pay and I'm trying to hold for 2030 or Beyond so the idea for me is that I'm gonna hold this stock I know it's going to have some ups and downs but I'm just going to keep holding it to 2030 I think it's gonna be worth a lot more if I was more of a Trader or if I was worried about the gyrations in the short term this is an area where you could trim the stock and probably sleep better at night just trimming a little off the table how much is up to you again if you're happy with 100 return and that's what you got you would sell it but you would not want to look back so many people sell and then they look back you know six months and say I wish I wasn't a soul if you make the decision to sell you do it you're happy with the gains you made and you move on if not find a compromise maybe it's selling 10 of your position maybe it's selling cost basis and letting the rust run or maybe you're really bullish on it and you don't want to trim any even though you know it could easily drop 20 30 percent this stock had dropped 30 percent and I wouldn't be surprised and I'm not saying that's going to happen I'm just saying my expectations as a long-term investor this thing is running pretty hot I think that that hype is going to continue though and I think there's a lot of reasons to be bullish in the stock not necessarily that I'm going to buy it at 300 plus but as a long-term investor it's probably worth more if you're trying to play this safe and really you know Buy Low and sell high this is an area you're going to be trimming at 300 plus not buying now earnings coming up my expectation is that they'll beat on top and bottom lines but then what is the guidance going to say and what's the market baked in for expectations so I think there's a solid chance the stock will sell off some I think it's really hard if you want to own Nvidia because people are saying I can't wait for it to pull back I don't know if it's going to pull back to 178 dollars it certainly could happen but you might see it pull back to say 250 and then you have to decide do you still want to buy it at that price which is still an elevated price and that's why I like to buy stocks when they're on their downtrend why it's important to have conviction and do your homework and have due diligence and understand the companies you're owning so that when they go down you realize that it's just the stock action and not the actual company that's broken the stock price was broken for NVIDIA not the company and now you might argue that the stock price is broken again but the other direction so in the end do what's best for you I'm bullish I'm personally not selling any but I could easily see a case where somebody would want to trim or maybe even sell out of their position here and it really comes down to the person if you're a Trader if you're an investor what your goals are your timelines why you bought in the first place how it fits in your blueprint and so on I think Nvidia will be worth a lot more in five or ten years but I don't think it's going to be a straight line up from here I appreciate your time and attention
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