Nvidia Stock and other AI related stocks absolutely mooned with the AI bloom of Chatgpt and increasing interests in Artificial Intelligence. It seemed as if AI is a fairy dust that companies could sprinkle on their stocks to make it more lucrative to investors.<\/span><\/p> However in these last days, NVDA stock, the so-called Godfather of AI stocks, has received an unexpected beating and dragged down the whole AI and semiconductor space. Many traders and investors alike are fleeing the markets and many consider the AI hype over.<\/span><\/p> But the question that keeps cycling through many minds is whether the AI hype is just hype or of substance? In this article we will cover the latest Nvidia news and analysis and see if you should buy the dip or let it RIP.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t Simply put, over extension. No matter what stock it is, it’s never gonna go up forever. But why is everyone panicking? The story goes back to Super Micro Computer Inc (SMCI) and the unhealthy habit of releasing early earning reports. <\/span><\/p> Those who were accustomed to SMCI early releases were shocked to find out that the company intended to kick the habit, causing many shareholders to go short in anticipation of bad news from SMCI.\u00a0<\/span><\/p> This sell off spread to Nvidia Stock and many consider it to be the initial cause of 20% price drop of NVDA shares. <\/span>This might be one of the underlying causes, but it isn’t the only one.<\/span><\/p> The prices were simply too high for new investors and the sustainability of it was under question, resulting in people taking profit sooner or later. In other words, Nvidia’s stock price is naturally being corrected. But what about the AI space? Did it run out of hopium or was AI simply not practical enough?<\/span><\/p> With the price of Nvidia shares down 20%, it has affected other companies and dragged ETFs and Indexes down with it. However, It seems the AI hype is not over, as many giant tech companies are doubling down on building AI infrastructure. <\/span><\/p> One of such companies is the Japan Sakira AI, which stated that they have plans to five-fold the amount of GPU units bought from 2000 units to 10000 in the next 3 to 5 years. In fact GPUs and other processing units are in such high demand that many companies are considering coming up with their own chipsets to meet demand.<\/span><\/p> Although AI is the current big thing for tech giants in the US and it’s showing crazy bullish sentiments for the near future, it isn’t the only thing tech companies offer. The data shows that other tech markets like PC, Smart Phones, and servers are not performing well and they might hinder the performance of the Nvidia company overall. <\/span><\/p> The other factor that affects the future of Nvidia is their power hungry hardware. Nvidia GPUs though powerful, consumes an unprecedented amount of power relative to its competitors such as AMD. This might bottleneck companies’ profit margin which in turn affects earning and ultimately the stock price.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t As Nvidia price falls many refer to it as a great discount and all those who are yet to jump on the hype train must do so immediately or lose the chance forever. But to what extent is this true?<\/span><\/p> Fact of the matter is that no one knows what’s gonna come next for Nvidia but we can guess some rough estimates based on the data we have at hand. The question you should ask at this point is what makes a company valuable? Is it the product? Is it the price of each share or the dividend yield it pays?<\/span><\/p> The answer is plain and simple, everything goes back to the company\u2019s earnings. The more revenue and cash flow it generates the more valuable the company is. In the following section we will analyze Nvidia stock Price to Earning ratio (P\/E) and compare Nvidia earning data to other tech giants to decide whether NVDA is a buy or not.<\/span><\/p> As of writing this article the P\/E ratio of Nvidia stock is at 63 which is relatively a high number and signals the nvidia stock being overvalued. On the positive side, Nvidia’s net income has gone up 581% this year while the company debt has gone down 6.74% which is not bad for an operating expenses increase of 15.86%.<\/span><\/p> In the table below you can see a comprehensive comparison of three tech behemoths. As shown in the table below (Data provided by <\/span>Stock.MVP<\/span><\/a>), Nvidia clearly has performed superior to the other two.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t \u00a0<\/p> Based on the provided data, if the AI hype continues as frenzied as before, the optimistic view is another 50% increase till the next year while the conservatives estimate a 35% increase in price. In addition to earning reports, supply chain disruptions can also affect the price. TSMC stands as the heart of semiconductor stocks and the looming threat of China can result in major supply chain issues and a global price increase of nearly all AI hardware.<\/p> So the fundamentals are looking good for the future of Nvidia, but will Nvidia share owners gain more profits in another bull run?<\/p>\n\t\t\t\tTable of Contents\t\t\t<\/h4>\n\t\t\t\t\t\t\t
Why is the Nvidia Stock going down?<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
Is Nvidia a buy?<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
![\"Nvidia-Stock-Comparison\"](\"https:\/\/metatradingclub.com\/wp-content\/uploads\/2024\/05\/222-1-1024x420.png\")
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![\"Nvidia-Stock-Technical-Analysis\"](\"https:\/\/metatradingclub.com\/wp-content\/uploads\/2024\/05\/QMWwobvt-1024x501.png\")
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