Despite Nvidia’s meteoric rise, the stock may be overpriced.
Transcript:
GEORGE SEAY: Nvidia’s risk is the fact that they’ve they’ve come so far so fast. I mean, it’s been a 10 x increase in value over about 2.5 years. It’s been an amazing rise for Nvidia. It’s funny you mentioned that I’m watching it every day because I’d love to buy it. I don’t own it currently except in index funds, and I’d love to get a much higher position in it, but I don’t think it’s cheap enough. You look at their margins and a lot of people have been saying, hey, it’s cheap vis a vis the S&P 500 index because of all the growth they’ve gotten all that. Well, that’s true on the on the nominal surface of things. But if you extrapolate their 70% plus margins into the future, that’s true.
If you think their margins are going to compress due to a exceeded competition from other rivals over time, which I think is the case. It’s it’s not so cheap. So you can afford to be patient. I think Nvidia’s got a lot of choppiness ahead of it. So I’d be circumspect and just watch it and bide your time for now.I think it’s a great company, but I think the price right now is is is not attractive. I think it’s very similar to apple in that the price is just too high. Apple doesn’t have near the growth that Nvidia does currently but I think both stocks just the price is just not attractive. You just want to buy something in the grocery store, so to speak, when it’s on sale, not when it’s at a premium price. And Nvidia is still at a premium price.
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