观点 | 如果你踏空了英伟达,那么现在最好别买

Opinion | If you're missing out on Nvidia, then it's best not to buy it now

巴倫週刊 ·  May 30 08:52

Author/Ben Levinson

$NVIDIA (NVDA.US)$The stock has surged again, but you probably don't need to buy it now because you probably already own it.

If you don't own Nvidia shares, it would be very painful to watch it soar the way it currently does. Nvidia shares are up 15% in the past week's trading and 33% over the past month. Over the past year, including dividend reinvestment, it has reinvested 249%.

You can earn 100% of these benefits by holding individual Nvidia shares. The company's earnings grew from $3.34 per share in 2022 to $12.96 per share in 2023, and is expected to more than double to $26.89 by 2024, all driven by growing demand for chips used in artificial intelligence applications. Despite the sharp rise in the stock price, the stock is still relatively cheap based on the expected 12-month price-earnings ratio, and the increase in earnings is an important reason.

Every day, I feel like new headlines are driving Nvidia's stock price higher. On Tuesday, May 28, Nvidia shares rose 7% to $1139.01 due to news that Elon Musk's xAI has just raised $6 billion, which could increase demand for Nvidia chips. Meanwhile, last week, the company released financial reports that exceeded expectations and a “one split of ten” stock split announcements.

Nvidia's profit margins are amazing. The profit margin based on profit before interest and tax (EBIT) is close to 70%. This level of profitability is strong, but it also raises the question of whether they will eventually decline. But Melius analyst Ben Reitze (Ben Reitze) isn't worried about this. “Of course, profit margins may decline, but at such a profit scale, a profit margin of 60% or more is truly unique,” he wrote, “We think (Nvidia) is still worth it.”

But don't feel like you have to buy this stock right now. The good news is that you probably already own some Nvidia. Most investors hold some form of market capitalization-weighted S&P 500, and Nvidia is the third-largest stock in the index. Nvidia accounts for 5.9% of the S&P 500 ETF funds, second only to Microsoft and Apple.

Can you have more Nvidia? Of course, wouldn't that be great? For example, the Asus Russell 1000 ETF (iShares Russell 1000 ETF) fund invests 9.4% of its portfolio in Nvidia. As expected, over the past month, it had a return of 5.5%, while the SPDR S&P 500 index had a return of 4.2%. However, for the purpose of diversification, ordinary investors may not want any single stock to account for more than 10% to 15%.

However, it was always clear in hindsight. Now I want to buy Nvidia stock because it has risen so much in the past week, but it seems like it's too late to start again. After all, Nvidia alone was up 30% in May.

A better option would be to wait for the share price to fall back, just like in April, when Nvidia shares fell 16% from their highest point and then rebounded again. Of course, that means you have the courage to buy when you feel like everyone else is selling off.

But it's usually better than going with the flow.


The translation is provided by third-party software.

The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
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