From Nasdaq: 2024-05-21 04:03:00

Nvidia has seen a 500% surge in its stock since the start of 2023, but smart investors like Stanley Druckenmiller believe the rally is losing steam. The AI chip stock is no longer a top pick for Druckenmiller, who sold over 70% of his stake in the first quarter. With a market cap of $2.2 trillion, doubling from here could be challenging.

Despite the skepticism, Nvidia is poised to impress with its first-quarter earnings report. The company reported a 265% increase in revenue in the fourth quarter to $22.1 billion, and adjusted net income surged by 491% to $12.8 billion. With guidance forecasting revenue of $24 billion and adjusted net income of $13 billion, Nvidia seems likely to surpass expectations yet again.

Competition remains a key concern for Nvidia, with the likes of AMD and Intel posing potential threats. However, the company’s strong performance, dominance in the AI chip market, and partnerships with tech giants like Tesla and Meta Platforms indicate a promising future. If Nvidia can maintain its growth and margins, the stock is likely to continue its upward trajectory.

Investors contemplating a stake in Nvidia should weigh the stock’s potential against the risks. While Druckenmiller has scaled back his investment in the company, the overall outlook for Nvidia remains positive. The stock’s reasonable valuation, history of beating guidance, and strong business fundamentals suggest that Nvidia could still offer significant upside potential for investors.



Read more at Nasdaq: Should You Follow Billionaire Stanley Druckenmiller and Sell Nvidia Stock Before Thursday?