Chipmaker Nvidia has been dominating the headlines over the past year, especially since its stock price rose an astronomical 240% in 2023. His popularity shows little sign of slowing, and while the stock was flat last week, he’s still up nearly 80% on 2023. year to date. Most analysts remain bullish on Nvidia, according to FactSet data. Of the 59 analysts covering the stock, 52 have rated it with a buy or overweight rating and 7 have given it a hold rating. The average analyst price target is $1,004.89, suggesting an upside potential of nearly 12%. However, the huge rise in Nvidia’s stock price has raised questions about whether those who haven’t invested yet should buy the stock now or wait for the stock price to drop. CNBC Pro spoke to two fund managers who had differing opinions. Buy NvidiaTrent Masters, portfolio manager at Sydney-based Alfinity Investment Management, recommends buying Nvidia, although he admits it’s “difficult to buy a stock that has already gone up so much.” ing. “I personally missed out on Nvidia’s opening price and only bought the stock for the first time when the stock rose to $390 after the earnings call last May. I probably haven’t bought a stock that has already gone up significantly in value over the last 10 years. That’s probably one of the hardest things to do because it seems like you could be making a mistake. But I think investors need to look at these things objectively,” he said. “Revenues have already quadrupled to $29 per share, which is something we’ve never seen before.” Masters’ only concern is that the chip maker’s long-term It risks losing some market share to competitors like Advanced Micro Devices. But he remains bullish, given the demand for the chipmaker’s suite of products, its high market share of more than 50% in the graphics processing unit (GPU) space, and the sustainability of its earnings. Adam Koons, the manager of his U.S.-based Winthop Investment Management portfolio ahead of Nvidia, takes a different view. He is reducing his stake in Nvidia, which he acknowledges is a “great company” with a virtual “monopoly” in the chipmaker space. “Nvidia is a company that has run too fast. Nvidia has survived the rally, but now the valuation is so high that they started selling,” Koons said, adding that he still has a position in the stock. . He is currently waiting for Nvidia’s valuation to “normalize” a bit before increasing his holdings again. The metrics he’s using to assess this include normalizing the company’s price-to-earnings ratio and adding additional revenue streams that “will justify the valuation going forward.” For example, he projects sales growth of nearly 50% annually over the next five years to justify the stock price. “If that happens, I’ll definitely buy more shares. I’ll probably be overweight, but I need a little more comfort. Even if I miss the upside, I don’t mind waiting just in case. “I’m paying the right price for the stock,” Koons said. His Nvidia total revenue for fiscal year 2024 increased 265% year over year. Despite reducing his position in the stock, Koons remains cautiously optimistic about Nvidia. “Long-term, this is definitely a company or stock that you want to own. But in the short-term, I think you need to be wary of increased volatility and big swings,” Koons added.
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