From Nasdaq: 2024-06-30 07:02:00

Nvidia (NASDAQ: NVDA) experienced a 10-for-1 stock split, driving shares up 150% this year. While exciting, this doesn’t alter market cap or valuation. High gross margins from hardware sales could be unsustainable due to potential fee increases from manufacturing partners, impacting long-term profitability.

Consumer AI industry profitability is low, with AI chip spending far exceeding revenue. Nvidia’s hardware exposure offers some protection, but a lack of diversification beyond data center business leaves the company vulnerable to a slowdown in chip demand. Downgrading Nvidia from a buy to hold due to risks and potential stock price pullback.

Considerations before investing in Nvidia: Motley Fool analysts highlight 10 top stocks excluding Nvidia, warning of possible monster returns. Stock Advisor’s history of high returns compared to S&P 500 since 2002. No position on Nvidia held by author. Motley Fool discloses positions in Nvidia and Taiwan Semiconductor Manufacturing.



Read more at Nasdaq: 3 Risks to Consider Before Buying Nvidia Stock After the 10-for-1 Stock Split