Trade Alert

Accumulating Nvidia shares, starting here.

_{Posted by Club Member Mark Ace21 25.8.23}

I’m a bit late to the Nvidia party and missed all of Nvidia’s 200% YTD rally, but after seeing Nvidia’s Q2 earnings, the company’s fundamentals are undeniable, so starting to accumulate a position in Nvidia here.

The shift from CPU to GPU chips due to the need for parallel computing will be a persistent and sustained long-term trend.

Nvidia has decades of R&D in designing chips for AI applications, it will be hard for competitors to quickly catch up. Therefore, over the near term, the vast majority of AI infrastructure and chip spending will flow to Nvidia. Nvidia is not just supplying the chips, there’s a software layer/programming language model on top, so it’s vertically integrated, which helps create a “network effect” that is sticky and self-reinforcing, where developers want to write codes and build on Nvidia GPUs leading to more Nvidia sales, which leads to more developers wanting to build using Nvidia chips, etc.

Nvidia has demand visibility for the next 9 to 12 months. Perhaps some of this is double booking and overordering by customers given the current supply constraint. I think markets are pricing in this risk and are expecting Nvidia’s growth to slow to 20%-25% in 2025. The upside catalyst for the stock is if 2025 growth exceeds current market forecast. I’m happy to take “the over” on this, I think 2025 growth could be north of 30%-35%.

#Nvidia #New Ideas

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