As the stock gets closer and closer to $100, the more bullish we become for value, and eventual returns to growth in a few quarters. We think they emerge as leaders in a rebound. The market is a forward indicator, and we like the setup for this stock to rally hard. Once the Fed is done hiking, markets will rally, even if the economy is feeling the worst of it. We expect a few more weeks of pain, and suspect that CPI inflation data will be a main catalyst higher or lower for markets. While macro demand may ebb and flow, and NVIDIA might be coming into a slower few quarters, we think you need to buy into the weakness to position yourself to take advantage of the turnaround in markets. Now, after hundreds of points of declines, the stock is actually rather reasonably value for the growth of the company. It became a stock that just continued to get beaten on. NVIDIA stock had truly been a winner up until 2022. We argue that demand is far less cyclical than in years past, because chips are in everything. The market is pricing in disaster and has sent semiconductor stocks to their lowest level in two years. Perhaps we are coming into a glut, as many question whether the Federal Reserve's actions to rein in inflation will have catastrophic impacts on the consumer and businesses alike, and subsequently the demand for chips in computers, vehicles, and as well as data center demand. Sure, there is always going to be spiking and waning demand, and there will always be shortages and gluts of certain chips.
We really like how the situation is starting to set up for an investment. NVIDIA Corporation (NVDA) is a semiconductor stock and one that we have started buying in the recent onslaught of weakness. There is no perfect time to buy but we are nearing the levels that are appropriate to scale in again.
Huge buybacks and a small dividend boosting shareholder value.ĮPS growth to resume in 2023, though we would love to see operating expenses be better controlled. Slowing demand in gaming to be offset by data center and automotive demand. Semiconductor stocks at their lowest level in two years.