The Shorts Are Fleeing NVIDIA Corporation (NVDA) Stock Ahead Of Q4 Earnings

And as a result, McConnell was also apprehensive about the potential impact of these developments on Nvidia’s sales mix, and thus revenue, given that the problem was noticed by him largely with reference to higher end, higher ASP GPUs. We discussed some of McConnel’s concerns in more detail in this post on NVIDIA. Then there was also some talk about Intel’s upcoming third generation of Xeon Phi processors and how they could eliminate the need for GPUs (2) in deep learning or machine learning related applications. However, Nvidia has simply shrugged off all the negative sentiment to march back up to over $111 a share, where it closed the trading session on Friday.

Should You Buy NVDA Stock Now?

Clearly, it appears as if NVIDIA Corporation (NASDAQ:NVDA)’s dream run isn’t over yet, even after a near 280% rally in the last twelve months. The question is, should you buy into NVDA stock now? At its current PE of nearly 60 times trailing twelve months earnings, and with a price to sales ratio of nearly 10 times TTM revenue, NVDA stock is very expensive. Further, the stock is currently trading well above the analyst consensus price target of ~$100 a share.

So, even the slightest disappointment could lead to a post-earnings correction. In the long term, Nvidia comes across as a good opportunity to beat the market. To sum up, while there could be volatility in the short term, Nvidia stock looks like a good opportunity for long-term investors. For now, risk-averse investors might want to tread with caution and possibly limit their exposure to the stock, buying on dips. For those who are not averse to risk, NVDA stock may be a suitable investment option.

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The article The shorts are fleeing NVIDIA Corporation (NVDA) stock ahead of Q4 earnings originally appeared on amigobulls.com. Watch our analysis video on NVDA (3).

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Additional Links:

(1) http://blogs.barrons.com/techtraderdaily/2016/12/12/nvidia-amd-uh-oh-graphics-supplies-piling-up-warns-pacific-crest?ref=il

(2) http://amigobulls.com/articles/this-could-hurt-nvidia-corporation-nvda-and-advanced-micro-devices-inc-amd-stock?ref=il&ref=im

(3) http://amigobulls.com/stocks/NVDA/analysis?ref=im