Dec. 01, 2023 2:58 PM ET NVIDIA Corporation (NVDA)
- Nvidia Corporation posted another strong quarterly earnings but it failed to impress Wall Street.
- The stock will likely remain in the range of $400-$500 for the next few quarters as the market gauges the long-term potential in the company.
- Nvidia likely saw a big boost in sales in the past few quarters as tech companies in China hoarded chips prior to restrictions placed by the U.S. administration.
- Nvidia will also face difficult comps in 2024, which will limit the ability to post good YoY growth numbers.
- Investors looking for an AI play can find better options than Nvidia stock at the current price.
The article discusses the recent fiscal Q3 earnings announcement by Nvidia Corporation (NVDA), which posted impressive triple-digit growth. Despite the strong performance, the stock failed to elicit a positive response from Wall Street, and the author anticipates a continued sideways trend for most of 2024. The analysis explores factors contributing to the market's subdued reaction and the challenges Nvidia may face in the coming year.
- Chip Restrictions Impact: The article suggests that the chip restrictions imposed on Nvidia have not been adequately factored into its stock price. It speculates that major tech companies in China likely stockpiled Nvidia's AI chips before the restrictions, leading to a surge in sales. However, this pre-emptive buying may result in reduced demand for chips in 2024, affecting Nvidia's growth.
- Tougher Comparisons in 2024: The author points out that Nvidia will confront significantly tougher year-over-year comparisons in 2024. While Nvidia's management expresses optimism about strong demand extending into 2025, the article contends that Wall Street seeks concrete evidence before fueling another bullish run. The anticipation of challenging comparisons may limit the stock's ability to post impressive YoY growth numbers.
- Market Dynamics and Competition:
