Entering text into the input field will update the search result below

I Was Wrong About Nvidia

May 30, 2023 1:27 PM ETNVIDIA Corporation (NVDA)97 Comments


  • I was wrong about Nvidia Corporation in my most recent article. The company put out the best earnings report I've seen in my 20-plus years of investing.
  • Instead of selling the news, investors bid up Nvidia's stock by another 25%, equating to about $200 billion of market cap value.
  • AI changes everything, and Nvidia is in a prime position to capitalize on the upcoming revolution.
  • Better than anticipated revenues and higher profitability should drive Nvidia's stock price higher long term, despite the possibility of a near-term pullback.
  • Yes, I sold my Nvidia stock too early and want back in, preferably in the $300-350 range (buy-in target).
  • This idea was discussed in more depth with members of my private investing community, The Financial Prophet. Learn More »

Nvidia campus in Silicon Valley

Sundry Photography

Nvidia Corporation (NASDAQ:NVDA) has been one of my most successful investments in recent years, as its stock skyrocketed by approximately 1,000% from its post-COVID-19 low of around $30 to its blowoff top of nearly $350 in November 2021. Nevertheless, Nvidia's stock price

Are You Getting The Returns You Want?

  • Invest alongside the Financial Prophet's All-Weather Portfolio (2022 17% return), and achieve optimal results in any market.
  • Our Daily Prophet Report provides crucial information before the opening bell rings each morning.
  • Implement our Covered Call Dividend Plan and earn an extra 40-60% on some of your investments.

All-Weather Portfolio vs. The S&P 500

Don't Wait! Unlock Your Own Financial Prophet!

Take advantage of the 2-week free trial and receive this limited-time 20% discount with your subscription. Sign up now, and start beating the market for less than $1 a day!

This article was written by

Victor Dergunov profile picture

Victor Dergunov is an independent investor and author with 20 years experience. He preaches diversification and shares investment ideas across all market sectors. Victor aims to help readers build portfolios that perform well in all economic conditions.

He runs the investing group The Financial Prophet where he covers all market sectors and shares strategies for well-diversified investing. Features include: the All-Weather portfolio, trade alerts, technical analysis, daily reports with his latest updates, covered call strategies, and direct access in chat. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NVDA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am long a diversified portfolio with hedges

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (97)

GameBuzz profile picture
@Victor Dergunov Major props for admitting the error and even putting it in the title! I wish more writers here would have more humility and admit mistakes, so all of us can learn from them and improve. If Buffett can say he screwed up in front of his own shareholders, Internet writers and WS analysts should have no issue doing the same.

I still have my shares but sold a covered call against them far too early and have been rolling out and up ever since, lol. At this point the stock would have to have another 40% or more drop to make all the tabled profits back but like you I am in from much lower. May we both do well going forward.
This pullback to $379 area feels like the old “pullback to gain momentum” again. Hard to just go up virtually every day, so the pullback allows a new momentum fueled leg up. I’m thinking we get close to $450-500 on this run. I guess we’ll see.
@JDoe20 Sounds crazy, but I wouldn’t be surprised lol
Trying to trade in and out of Nvidia will get you run over by a speeding truck. It will have a pullback and when it does it should be at the top of the buy list. 🚀
@Cliffhanger55 How much pullback? Some are saying to wait until the gap is filled - the one created in the morning after ER
@cpraderas You can layer in at the lower 300's. Some people think we are in a new bull market. I am not convinced of that. Another market drop could bring it back to test the 230 area by the end of summer.
@Cliffhanger55 I would consider that a gift. I have plenty of cash and am still expecting a recession, though one does have to wonder at this point.
Sighcopath profile picture
The fly in the ointment for this investor is how did NVDA "hide" a 50% revenue increase for this quarter (remember we are 1/3 of the way through NVDA $11 Billion revenue quarter) from the analysts. These analysts spend their entire working day, and have huge research assistants doing the same thing, trying to gain a slight advantage for their clients investments.

When I finally see an explanation regarding how this $4 billion miss was made by every analyst in technology then I will reinvest in the market. How investable does a company become if the company missed analyst expectations by 50%? It is not the 50% increase in revenue guidance that is important. It is the "50%" miss by the analysts that needs to be understood! How soon before we start to see changes in analyst leadership at these investing houses if the 50% increase in NVDA revenue actually materializes? Why are companies paying these analysts these kinds of salaries when they could just hire a meteorologist for a lot less money!
01 Jun. 2023
@Sighcopath I must disagree. When I started investing in the 90’s, it was very common (especially in tech), to have the QR results a few days or a week in advance of the release. Not because of a pre release, but by watching the stock price. Up was a good report, down a poor. That never ever happens today and it proves we all have the same information. We small investors have the same chance to get it right as the analysts or the hedge funds.
Just a final note, I saw the first change with aapl under Steve Jobs. He stated publicly than no one will know their results again in advance. And he was right to this day and I’ll credit him with the spillover to the rest of the mkt, along with the SEC.
Sighcopath profile picture
@PMJ Your going to compare todays investing climate and the availability of information to analysts with a time before the internet, social media and size of NVDA compared to the rest of the market to APPL? If I remember correctly the "Suits" kicked Jobs out of the C-suit because he was wasting money. Not the best analogy!
A.L.E.X profile picture
NVDA is in the spotlight now and of course very expensive. It's not too wise to buy maybe future potential at such a high price. It's a lot of other companies out there that will profit from AI and trade cheaply
Victor Dergunov profile picture
@A.L.E.X Of course, and that’s why I think we can get in at a lower price point
Everyone selling Nvidia at nearly $400 and beyond yesterday and today so they can lock in massive profits..who are they selling to?

Momentum traders.
Bigly Redpill Dispenser profile picture
@mobyss Me

I bought NVDA in 2016 and sold in 2020.

Just bought back in at the high.

Basically when it comes to NVDA I have made sick money, but not nearly as much money like FU money as if i had just held on thru Covid.

I am like the Costanza of market timing NVDA so don't follow me down this path.
Ya guidance eps for q2 is $2. So annual would be around $6.
So nvidia isnt as overpriced as thought. At 60-70 pe it isnt super overpriced if it can deliver 40 pct eps growth yoy. So the main question what is the growth comp for 2024 , 2025 ?
Best earnings in 20 years? I would think that over that time you could find a company that soundly beat earnings estimates that hadn't been depressed so much. I guess if you are going by the prediction of future earnings then this was truly one for the record books.
Victor Dergunov profile picture
@R d B we’re talking billions of dollars here… I’ve never seen the analyst community so far off the mark…
ErikInvest profile picture
Appreciate the honesty, it does you credit. If it's any consolation, we all made a mistake selling NVDA. You're in good company. The arrival of ChatGPT was unforeseeable.
A Farmer profile picture
"The open gap in the $320-360 range could get filled,..." Hope you are right this time. But I feel NVDA CEO Huang likes boasting too far . He suggests his 15 years-work on 'accelerating computing' ecosystem is the next computing revolution.' But two year ago, he only was talking about 'metaverse' things without mentioning 'OpenChat' AT ALL. Besides, NVDA's cFo Kress Colette sold 10,741 shares on 1-26-2023 (3-14-2023 filing) at $200. Please note, this is CFO, the number one person deals with NVDA's operation. Nothing happened for NVDA in fundamentals from Feb - May 2023. We are hear to trade market hype purely.
TOP is in.
RasmusT profile picture
I don't think it was a mistake to pull the plug on Nvidia when you did. If your reasoning for the decision at the time was based on logic, it was a smart move to collect your winnings. As in poker, you always tend to beat yourself in retrospect when u fold and would've ultimately had the best hand as you got that set on the river. You make the best decisions possible based on the information you have at a given moment. You made a hefty profit still and didn't lose any money, which is the most important thing. This shouldn't alter you decision-making process in any way. Sometimes the outcomes just are the ones that are more improbable. Better to sacrifice potential upside rather than risk your current unrealized profits!
Victor Dergunov profile picture
@RasmusT Thanks. Yes, I also believe there's no shame in taking 100% profits after two months...
All the AI hype by the CEO is a tactic to deflect from the its dangers ..and people have fallen for it. AI is dangerous and should be regulated as there is a not insignificant risk of it destroying humanity:
@Gyro Gearloose True but that’s an entirely different topic and position. AI is coming whether you like it or not, you may as well profit from it.
When would you consider buying should the price not drop down to the $320 to #350 level?
I bought at $89 and (unfortunately) sold 20% at $269 on March 29th. At least still have the majority!
Victor Dergunov profile picture
@BARKERGLEN I'll consider buying in the $350-300 range. I think the stock could head there soon.
Thanks for the article!
So would anything cause you to buy higher than $350?
Victor Dergunov profile picture
@cpraderas Probably not. There is a high probability of a 10-20% correction for Nvidia's stock.
@Victor Dergunov How do you calculate that “high probability”?
I’m thinking that it goes up to $450 or so before it consolidates and maybe corrects. Maybe/maybe not goes back to $350. It’s been badly miss priced, so I’m not sure it goes down that much and not worth missing it if I feel like it’s going to $500 in 3-6 months. It’s not exactly a normal path, Nvidia stock is not normal as you have stated, right?
@Victor Dergunov I only see a correction happening if they come in soft on a quarterly report. To me, this company will be a bit like United health group, always exceeding expectations.
bazooooka profile picture
fomo is dangerous
Victor Dergunov profile picture
@bazooooka And that's why I am not chasing. After all, Nvidia is not the only company with significant AI opportunities, but it is the most hyped one now, closely followed by MSFT.
@Victor Dergunov Victor, any exposure to Pagaya? PGY, AI FinTech model. To me, they are on sale at about $1.17
Technical analysis is the refuge of the stock market timing scoundrel. Why bother waiting for $300-$350 (large range, I might add) when it may not reach that until a 3-to-1 stock split, when you can buy now at $400 and hold it. Nvidia may be looking at around 40 billion in profits in the next 4 quarters. Next quarter alone is about 8 billion in profit!

Given how well run of a company this is and how important it is to the generative AI boom, it's entirely fair to price it at 35-40 times earnings, which puts it in 1.4-1.6 trillion dollar market cap range. I wouldn't want to miss out on something like that over $50/share in stock price. Based on your projections, if the stock could hit $1050/share in 2029, why wait until $350 to buy?
Victor Dergunov profile picture
@prema_donna I believe there will be a better entry point around $300-320. However, if there isn't I have plenty of other excellent stocks in my portfolio.
Fountainhead profile picture
@Victor Dergunov Could you list those other excellent stocks, please. Thanks!
Victor Dergunov profile picture
@Fountainhead I’ll list one, my largest portfolio holding at more than 10% weight, Palantir, up by 75% QTD…
Unless there is a blank swan event, NVDA will not see sub 350 again in near future. Look at its strong performance in the past, you will see the uptrend usually lasted a few quarters. As you hinted, its guidances and Wall Street estimates will keep rising. On a forward PE basis, NVDA is cheaper than AMD.
AjitMD profile picture
The majority is expecting a significant pullback and have cash ready to buy. Plus a lot of Put/Call premium. Best to add with 10% drops. Lot of sold out bulls. Hard to pick bottoms. Congrats to long term bulls.
Victor Dergunov profile picture
@AjitMD I agree a 10-20% correction should arrive soon.
ALLCTT profile picture
I will wait till $240 then I will reload NVDA. Now any company using the word (AI) the share price will jump. This is just like dot.com bubble scenario.
Victor Dergunov profile picture
@ALLCTT $240 - Yes, that would be nice...
@ALLCTT never going to happen
ALLCTT profile picture
@JetsFan60 last time NVDA can drop till $138++ why it cant come down at $240
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.