NVDA
🛡️ While Nvidia’s essential microchips for AI are expected to be exempt from tariffs, insulating it directly from import duties, the stock has still declined significantly.
📉 The decline is attributed partly to profit-taking after a strong run and broader market panic, but also reflects concerns about the sustainability of massive AI investments by its clients.
❓ A potential recession triggered or exacerbated by tariffs could lead companies to cut back on AI spending, impacting Nvidia’s future growth prospects despite its current valuation appearing reasonable (around 20x earnings).
@Artedeinvertir:
“Nvidia too. Nvidia is another one that has dropped significantly. In the end, it’s true that they will establish that exception, which shouldn’t affect it, and people are taking profits, but 20 times earnings is not very high if expectations are met. You know that the risk here with Nvidia, I’ve told you many times, is not the tariffs, the economy, nor is the valuation very high; it’s whether companies will continue investing at the current level. And for that, AI has to give them profits, but it’s not giving profits to the Magnificent Seven, and they are just investing and investing, waiting to see what happens. So people say, ‘Wow, if a recession comes on top of this, Nvidia’s clients might opt for the defensive, we don’t consume, we cut investments in AI,’ and that could affect it in the short term. That’s a risk that needs to be evaluated and is difficult to evaluate, but it’s important. But the valuation isn’t either; it’s not a PER of 20 with such high growth that Nvidia has.”
Watch the exact part of the video where Arte de Invertir talks about Nvidia here:
Watch the video on YouTube
Read more articles analyzing Nvidia (NVDA) at the following link. NVDA stock.
