Nvidia Q4 Preview: A Post-Earnings Correction Can Be A Buy Opportunity (Archive)
Backlog strength, mix-driven margin gains and trough-like valuations set up an attractive pullback buy.
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
- NVIDIA broadly performed in-line with the S&P 500 since my last update in May 2023 until January 2024, when it made a large alpha run that I missed.
- Backlog growth indicates strong unrealized revenue growth potential ahead as RPO numbers are accelerating strongly, providing growth visibility beyond 2025.
- Due to a favorable top-line mix shift toward the Compute & Networking segment, I expect further gross margin expansion in Q4 FY24 and beyond.
- Despite a record-high market capitalization, NVIDIA's valuations are near 5-yr trough levels, presenting an opportunity to buy.
- Technical analysis is bullish, but I would prefer to wait for a pullback to join in on the buys, especially since I am wary of pre-earning rallies in the stock as it may lead to a sell-off upon earnings release.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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