Today (July 1st, 2024), the sky was falling and I got stopped out from my NVDA position in the morning. I set my stop loss at $120 a share. But later, buyers stepped in and started buying. So, the doom and gloom hasn’t happened (it still may happen but at this point it is less likely), so I re-entered the position.
 

Everybody is crazy about Nvidia (NVDA) stock and everyone wants to own it. I was a bit cautious buying it because in my opinion, the stock is parabolic. But there were two things happening recently, and both events made me to reconsider.

 

 

One event just happened – sell off. NVDA was selling recently and corrected almost 10% (not exactly but close). Today, big money are buying back. So I decided to do the same and bought 50 shares today. Nothing crazy like the guys from WallStreetBets who go all in (and usually lose all), but enough to make me happy.

I also checked the stocks valuation (this was sparked by Tom Lee from Fundstrat and his few interviews on YouTube and MSN). And when checking the valuation of NVDA, we can see that today, and per today’s metrics, NVDA is overvalue, but when looking into the near future, we see that the stock is fairly valued and slightly undervalued (yes, it sounds weird but it is undervalued).

 

 

The second event that happened last week was NVDA announcing going into cloud business, creating its own cloud service equipped with their own chips and hardware but also developing a software that will run the cloud. This literally shifts NVDA from a hardware maker to a service provider (and along the way bullying big players like Amazon into allowing them to use their facilities). This is a big deal. It is the similar Apple (AAPL) used before shifting from a phone maker to a service provider (and Apple today has ever growing service segment that is now as large as the phones segment). This will make NVDA surviving the tough competition once the IA chip making segment loses steam (which it will eventually do).

Today, I bought 50 shares of NVDA and later on, I may buy more.