Nvidia: Difficult To Justify A Sell Rating, But It Must Be Done

Summary

• Nvidia stock has seen a bullish momentum in recent weeks as the macro trade situation improves, and the company posted a good earnings beat.
• However, it should be noted that Nvidia stock is barely over the $135 peak it reached a year back in early June 2024.
• Despite beating earnings estimates and showing very good growth momentum in the last few quarters, Nvidia stock has not seen a big upward momentum since mid-2024.
• The stock needs a “digestion phase” of another few quarters, and the competitive environment could become more intense in the near term.
• The stock is trading at 25 times the forward EPS estimate for the fiscal year ending Jan 2027 with a very large gap in forward EPS estimates which reduces the return potential in the stock compared to the risks.

BING-JHEN HONG/iStock Editorial via Getty Images

Nvidia (NASDAQ:NVDA) has reported another earnings report where it easily beat the revenue and EPS estimates. The company has been beating the estimates for the last few quarters. However, it should be noted that the

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within 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.