Nvidia (NVDA) got an upgrade today…and the price got marked up big league. I think there’s still a lot more to go before this stock peaks. (June 08, 2017)
I want to look at NVIDIA ( NASDAQ:NVDA ). This has been a wonderful stock to hold, at least I think so. But it has been kind of a brutal stock to find a way in. If you haven’t been long because it gapped up here, it gapped right up against this resistance here, and if you are looking at buying it here you feel like, “Well, maybe I am going to get in on a triple top.” And then that is that. Then the stock just kind of kept going and by the time you figure out that maybe it is not moving back then you are really feeling like you are too late in buying it; and now the stock is up even more.
Here is the deal: Citigroup ( NYSE:C ) raised their estimates on this, they upgraded the stock from a price target of 145.00. Nice, you got your price target hit a few weeks ago and now it is up at 180.00 There is also conjecture that the stock could even double from here. I hope so. Here is how I am holding it: I am not really looking at this, I am looking at the weekly chart. If you look at this weekly chart and kind of consider it to be a daily chart, this is a stock that is just getting going. It has been in a very, very tight volatility squeeze for a while. Again, if we are just kind of looking at this as a daily chart it is 1, 2, 3, 4, 5 days into phase 1 of a volatility expansion. To me 200.00 would sure seem to be a pretty good price target for this stock to go in the next few weeks. Again, I am looking at this as if it were a day chart. It is not, it is a week chart. Now we will go back on the regular calendar of this particular planet and we can see, really, this is what it looks like.
The bottom line is this: This company is in perfect position, they’re in the pole position on artificial intelligence, gaming. They have got these GPUs that everybody is using, and those that aren’t using them want to use them. The growth rate on the company over the last 3 to 5 years is 20 percent EPS per year. That is actually pretty low, their earnings are accelerating. So you look back over the last 20 years, “Hey! Yes, that is a pretty good growth rate, 20 percent average EPS growth.” But then, wait a minute we are not making money on what has been done before. We are making money on what is going to happen in the future. And what we are really seeing is that sales and revenues are due to be increasing, to growing.
So what is this stock doing? Frankly, the stock is chasing growth. The stock is not ahead of itself, it is trying to catch up to the growth. So as long as the growth rate continues to move higher so is the stock price. So I think even at $160.00, if you are trying to establish a position to hold, I am not talking about trading, but if you are trying to establish a position to hold, say in a retirement account, you look at this chart and you could possibly even look to be retiring on this stock, the way it is moving.