① Nvidia will release the latest financial report after the US stock market on Wednesday; ② I have been optimistic that Nvidia's “Sister Mu Tou” chose to “cut her holdings and cash out” before the latest earnings report came out; ③ “Sister Mu” believes that the market's expectations for Nvidia are too high, and the stock has indeed risen a bit too much.
AFP, Feb. 20 (Editor: Huang Junzhi) As the biggest beneficiary of the artificial intelligence (AI) wave, after rising sharply last year, Nvidia has soared more than 50% so far this year. As the company will release its latest earnings report after the US stock market on Wednesday, its future direction has also sparked heated discussion on Wall Street.
Currently, analysts generally expect Nvidia to achieve revenue of 20.37 billion US dollars in the fourth fiscal quarter, a significant increase from 6.05 billion US dollars in the same period last year. Driven by the demand for artificial intelligence computing, the strong momentum of the data center business will support the company's revenue growth; earnings per share for the quarter were $4.59, compared to $0.88 in the same period last year.
However, “Sister Mu Tou”, who had been optimistic about Nvidia until now, chose to “reduce holdings and cash out” before the latest financial report was released. As of the end of 2023, Ark Fund held Nvidia shares worth over $100 million, according to FactSet.
In a recent interview, Cathie Wood (Cathie Wood), the head of ARK Invest (ARK Invest) and known as the “female version of Buffett,” admitted that she recently sold approximately $4.5 million worth of Nvidia shares.
She said, “We've been selling Nvidia shares for a while, mainly because we believe that for every $1 of AI hardware sold, AI software will generate $10 in revenue. All investors now understand that Nvidia is a key chip producer.”
She acknowledged that the current AI boom is not a bubble, and Nvidia is indeed a well-deserved leader in the AI field. However, “Sister Mu Tou” believes that the market's expectations for Nvidia are too high, and the stock has indeed risen a bit too much.
“We do think people's expectations might be a bit ahead of schedule.” She said she is concerned that the company will face in the future competition and the slowdown in demand.
She further explained, “If you look at hyperscale companies, such as Meta, Amazon, and Alphabet, they are all developing their own artificial intelligence chips. They are more specialized, so they are more targeted. Nvidia, on the other hand, is more versatile. It will only face more competition, and possibly a suspension of demand.”
Finally, “Sister Mu Tou” also pointed out that Nvidia is an extremely “cyclical” stock.
She said, “Taking 2017 as an example, the rise of the cryptocurrency industry led to a surge in demand for Nvidia GPUs. At one point, demand for Nvidia GPUs was too strong. That is, market participants rushed to buy GPUs, and there were multiple orders (i.e. double orders, triple orders, or even quadruple orders), which ultimately led to inventory backlogs.”
“Every time I hear about double orders, triple orders, quadruple orders to deal with shortages, I stay away.” she added.