NVDA
📉 The speaker sold Nvidia shares earlier in the year and expresses continued doubts about its future growth trajectory compared to its explosive past performance.
❓ Nvidia’s valuation remains a key concern; while multiples have decreased, they might still be high relative to slowing growth estimates (50% this year, 20-30% next year vs. 100% previously).
🤔 Uncertainty about the appropriate market multiple for Nvidia, given its decelerating growth, makes it a less attractive investment for the speaker compared to companies with clearer outlooks like Meta.
@InvertirdesdeCero:
“Alba asks, “How do you value Nvidia now that it has dropped? Would you buy again?” Well, the truth is that, eh, in my opinion, eh, I got rid of Nvidia shares at the beginning of the year. We did a live stream, and well, it generated a bit of controversy, all that when the whole Deeps issue appeared, which in the end seems like it didn’t really affect, eh, the company’s fundamentals and isn’t going to affect them. However, what needs to be understood in Nvidia’s case, and why I haven’t invested again, are the doubts about its growth. Eh, in the end, when we invest in companies, we don’t have to look at the stock price; what we have to look at is its valuation. So, Nvidia has been trading at considerably high multiples of, well, between 30 to 40 times in the last 2 years, and those multiples have been supported by the growth it had. It’s a company that has grown its sales and margins by nearly 100% for 2 years, eh, thanks to the important, or the significant use of its GPUs within, eh, the development of artificial intelligence. However, the estimates for the coming years are not as promising as they have been in the past. Therefore, eh, today Nvidia is at one of its most attractive valuations in the last two years, but it’s true that what will be the multiple that the market will apply to Nvidia if it’s no longer going to grow at those rates? And if when it grew at 100%, it applied between 30 and 40, and now it’s going to grow, I think this year around 50% and next year 30% or 20%, eh, and now it’s between 20 and 25 times, what is the correct multiple? I don’t know. So, if I apply a multiple of 20 times or 25 in my valuations, the numbers don’t work out for me. Eh, if I applied 30 or 40, yes, but logic leads us to think that if you’re not going to grow the same way, and the market values this way, it’s possible it won’t apply those multiples. But I repeat, it’s simply my opinion. Eh, I think right now in the market, there are other things that, for me, make it easier to be a co-owner of those businesses because I understand them better and because I believe the uncertainty surrounding them is nil. For example, Meta, eh, seems like a much better investment today than Nvidia, but for me and for my knowledge and conviction.”
Watch the exact part of the video where @InvertirdesdeCero talks about NVIDIA Corporation here:
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