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Welcome to Episode #395 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey is going solo to discuss if there is any value left in NVIDIA after its big rally of the last year.
Is NVIDIA expensive now or is it a bargain stock thanks to its big growth trajectory?
The Case for Buying NVIDIA Right Now
NVIDIA (NVDA - Free Report) shares are up 254% in the last year. It has also been one of the hottest stocks in 2024, gaining 91% during that time.
With NVIDIA trading at new all-time highs, why jump in now?
NVIDIA trades with a forward P/E of 38.8. While that is not in the traditional value stock range, which is normally under 15, that is cheap for NVIDIA, which has often traded above 40x over the last 5 years.
NVIDIA’s trajectory changed a year ago, as the demand for AI surged. It has beat, and raised, its earnings guidance each of the last four quarters. In the fiscal fourth quarter 2024, NVIDIA saw record quarterly revenue up 265% year-over-year, to $22.1 billion.
Earnings growth is equally as impressive. This Zacks Rank #1 (Strong Buy) is expected to see earnings jump another 84% in fiscal 2025.
NVIDIA’s Partners Also Expected to See Strong Growth
Skeptical about NVIDIA’s rapid growth? Tracey takes a look at two of its data center partners to see what their sales and earnings trajectory looks like.
Super Micro Computer is also in the AI trade. It’s hard to believe, but the stock has been even hotter than NVIDIA’s.
Shares of Super Micro Computer are up 259% year-to-date and 823% over the last year.
But its sales and earnings consensus estimates are also tracking NVIDIA’s. Super Micro Computer’s sales in fiscal 2024 are expected to jump 103.5% year-over-year to $14.5 billion. The earnings are expected to rise 83.8%.
Super Micro Computer is also a Zacks Rank #1 (Strong Buy) stock.
Vertiv is another partner company with NVIDIA on the data center side of the AI trade. Shares have jumped 69% year-to-date and over the last year are up 531%.
Vertiv is also seeing big growth from AI. It has been beating, and raising earnings guidance, for the last several quarters. Vertiv’s earnings are now expected to jump 32.8% in 2024.
Sales are rising, but not as quickly asat NVIDIA or Super Micro Computer. The Zacks sales consensus is looking for growth of 11.2% this year.
Vertiv is also a Zacks Rank #1 (Strong Buy) stock.
Is NVIDIA Too Hot to Handle?
It’s difficult to buy a stock at, or near, a new all-time high. But NVIDIA’s shares have made new highs many times over the last 5 years, as shares have surged 2000%.
Fundamentals matter as much as the chart. And NVIDIA has strong fundamentals right now, including sales and earnings growth.
Should NVIDIA be on Your Short List?
Tune into this week’s video podcast to find out.
[In full disclosure, Tracey owns shares of VRT in her own personal portfolio and in Zacks Value Investor portfolio.]
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The Case for Buying NVIDIA Right Now
Welcome to Episode #395 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey is going solo to discuss if there is any value left in NVIDIA after its big rally of the last year.
Is NVIDIA expensive now or is it a bargain stock thanks to its big growth trajectory?
The Case for Buying NVIDIA Right Now
NVIDIA (NVDA - Free Report) shares are up 254% in the last year. It has also been one of the hottest stocks in 2024, gaining 91% during that time.
With NVIDIA trading at new all-time highs, why jump in now?
NVIDIA trades with a forward P/E of 38.8. While that is not in the traditional value stock range, which is normally under 15, that is cheap for NVIDIA, which has often traded above 40x over the last 5 years.
NVIDIA’s trajectory changed a year ago, as the demand for AI surged. It has beat, and raised, its earnings guidance each of the last four quarters. In the fiscal fourth quarter 2024, NVIDIA saw record quarterly revenue up 265% year-over-year, to $22.1 billion.
Earnings growth is equally as impressive. This Zacks Rank #1 (Strong Buy) is expected to see earnings jump another 84% in fiscal 2025.
NVIDIA’s Partners Also Expected to See Strong Growth
Skeptical about NVIDIA’s rapid growth? Tracey takes a look at two of its data center partners to see what their sales and earnings trajectory looks like.
1. Super Micro Computer, Inc. (SMCI - Free Report)
Super Micro Computer is also in the AI trade. It’s hard to believe, but the stock has been even hotter than NVIDIA’s.
Shares of Super Micro Computer are up 259% year-to-date and 823% over the last year.
But its sales and earnings consensus estimates are also tracking NVIDIA’s. Super Micro Computer’s sales in fiscal 2024 are expected to jump 103.5% year-over-year to $14.5 billion. The earnings are expected to rise 83.8%.
Super Micro Computer is also a Zacks Rank #1 (Strong Buy) stock.
2. Vertiv Holding Co. (VRT - Free Report)
Vertiv is another partner company with NVIDIA on the data center side of the AI trade. Shares have jumped 69% year-to-date and over the last year are up 531%.
Vertiv is also seeing big growth from AI. It has been beating, and raising earnings guidance, for the last several quarters. Vertiv’s earnings are now expected to jump 32.8% in 2024.
Sales are rising, but not as quickly asat NVIDIA or Super Micro Computer. The Zacks sales consensus is looking for growth of 11.2% this year.
Vertiv is also a Zacks Rank #1 (Strong Buy) stock.
Is NVIDIA Too Hot to Handle?
It’s difficult to buy a stock at, or near, a new all-time high. But NVIDIA’s shares have made new highs many times over the last 5 years, as shares have surged 2000%.
Fundamentals matter as much as the chart. And NVIDIA has strong fundamentals right now, including sales and earnings growth.
Should NVIDIA be on Your Short List?
Tune into this week’s video podcast to find out.
[In full disclosure, Tracey owns shares of VRT in her own personal portfolio and in Zacks Value Investor portfolio.]