Nvidia stock has risen 25%, but investors face tough decision as future performance remains uncertain.

From Nasdaq: 2024-08-25 03:15:00

Chipmaker Nvidia (NASDAQ: NVDA) has seen its stock rise about 25% in a short period, trading around $124. With incredible revenue growth and earnings per share skyrocketing, investors face a tough decision on whether to sell or hold. Both bull and bear cases exist for the stock’s future performance based on supply-demand dynamics and market expectations.

Bulls point to Nvidia’s impressive top-line growth, with demand for flagship products exceeding supply. Revenue guidance for the fiscal second quarter of 2025 indicates continued growth. However, bears caution on the high premium valuation as any signs of declining revenue growth or earnings could trigger a stock price sell-off. Margin normalization and increased competition pose risks to Nvidia’s future performance.

While headwinds to margins and earnings growth could be more than a year away, the market’s forward-looking nature may start pricing in these risks soon. Nvidia remains a great company but a risky stock at current levels. Selling shares to explore better opportunities could be a prudent move for investors looking to maximize returns. The Motley Fool Stock Advisor suggests exploring other stocks for potential monster returns based on historical performance metrics.



Read more at Nasdaq: Nvidia Stock: Time to Sell?