Matein Khalid
I had flagged Nvidia in this platform as a must own chip stock on the eve of the AI revolution just before its historic Q2 earnings call in May 2023. Fast forward two years and Nvidia earnings are up 10X while its share price is up 8X since my post as it flirts with a $4 trillion market cap that awaits if the shares trade at 163 (they will, Sugar Daddy Jensen and Masa-san willing LOL).
Taco Tuesday actually boosted demand for the shares when it dipped to 157. NVDA was a no-brainer winner from the thaw in US-China trade relations in Geneva/London meetings in June and Trump’s wildly successful trip to the Gulf when Trumpster set up the ultimate sovereign AI bonanza for Jensen, aka Abu Chipster. Yet Nvidia is no longer the world’s top GPU vendor but an “AI algorithm colossus” as Jensen Huang prefers to call it.
Fundamentals are still massively aligned with NVDA whose full stack model will be goosed by the AI revolution’s impact in software, networking, cloud, digital infrastructure, AV and robotics. Never in the history of a Silicon Valley as a company this big exhibited revenue growth of 60% and EPS growth of 46% as NVDA does now.
On the charts, NVDA’s 65% surge since its post Liberation Day slump is the mother of all technical breakouts and I have seen nothing like this in any other mega cap I have ever traded on Nasdaq.
If the market breaks on another Trump induced temper tantrum on Powell, trade, Musk or geopolitics and the Volatility Index, just above 16 a mere two sessions after Taco Tuesday, so quiero salsa muy caliente por favor el Presidente Trump! If NVDA trades down to 145, its forward valuation will be 25.9X, an optimal entry point for me for a 200 target.
The adoption of AI reasoning model, AV/agents accelerates demand growth for next-gen Nvidia GPU product launch cadence and thus EPS growth. No wonder OpenAI, Google Gemini, Anthropic and xAI have all released reasoning capable, multi-noodle AI models that make me sure that my CBOE options based bullish strategy on NVDA is on the money.
At $4 trillion, Nvidia’s market cap is equal to India’s GDP, 4X Saudi Arabia’s GDP, 8X UAE GDP and more than the entire sector market cap of energy and consumer staples in the S&P 500. Yet in my risk/reward calculus, there is still money to be made in the ultimate gold rush this planet has ever seen since the adoption of electricity 125 years ago. As Britain’s SAS motto goes, “who dares, wins!”, so it was with NVDA.
Also published on Medium.
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