NVIDIA: Getting Some Mixed Signals (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• For the first time in NVIDIA's upcycle, there are broad downward revisions in expected capex from key customers. This, along with emerging in-sourcing trends are brewing headwinds.
• The impact of insourcing on pricing and a margin dip as Blackwell production ramps up may dampen margins for at least a year, and likely more.
• Valuations are more appealing now at a 1-yr fwd PE level of 36.0x. NVDA stock is still seeing strong fundamental earnings growth.
• Relative technicals vs. the S&P500 remain in bullish flow, but new buy entries may be riskier as the ratio prices are currently at a key weekly resistance level.
• The extent of revenue guidance beats vs. consensus has been falling over the past 6 quarters, indicating that NVDA stock is increasingly getting more 'priced in'.

Read the full article here.