$NVIDIA(NVDA.US)
Nvidia trades at 24 times forward earnings.Its 5-year average is 38 times. Earnings this week will come down to a few simple questions around inference, how large physical AI (robots) can become, Nvidia’s moat against custom ASICs, and if CapEx will continue to grow over the coming years. I continue to think the street is underestimating growth forecasts. Nvidia’s CFO already said their “$500B in 5 quarters” projection had increased in January. China revenue is still a tailwind. $Taiwan Semiconductor(TSM.US) earnings capex increase showed how much demand continues to come in.If supplychain issues are the biggest headwinds to revenue growth, that is a good problem to have. Not sure where the stock trades but it’s been flat for basically 6 months which has helped the multiple continue to stay more than reasonable. If Jensen really delivers, we could expect a serious multiple re-rating.Having said that, even if it trades flat…if growth projections continue to increase…the multiple would once again look very attractive and make it one of the cheaper Mag 7s to continue adding to.What do you think happens on earnings?Source: amit
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