NVIDIA shares advanced 26%. Time to buy?

In the long run, Nvidia (Nasdaq: NVDA) was incredibly satisfying for some investors. Nvidia has grown Fr. 1 739% Only in the last five years.

Recently, however, the price of the shares has gone through. It has already fallen by 26%since January.

Because Wall Street will be more and more nervous, it would not surprise me if we saw further falls.

Could it be an opportunity to buy for my portfolio?

The fall is understandable

On the one hand, I think there are several good reasons for falling NVIDIA stock price.

The microchips sector has experienced a dizzying growth in recent years, thanks to the huge demand based on AI. But there were also assessments of questions about the durability of this demand.

Additional these are recent fears that AI programs may require much less ChIP efficiency than before expected (powered by launching Deepeks), growing trade conflicts that threaten the escalate in supply chain costs, and generally growing fears related to the global economy. If the economy weakens, companies often limit expenses – and this can harm the chip market.

In addition, the valuation of Nvidia Stock previously looked high, so I don’t think the fall was such a surprise. Even now, the company still orders market capitalization of 2.7 %.

But has the price collapsed?

However, looking on the other side of the lens, a decrease in stock price may not make sense as it seems.

NVIDIA announced a dizzying set of results for 2024. Revenues increased by 114%, while net income increased by 145%. These types of growth are hard to achieve even in a compact size of activity, but for one that already has a huge turnover, they are unique.

The company still sounds stubborn and did not seem to be alarm bells about the slowdown of customer demand or a negative impact on wider economic uncertainty.

The last quarter showed a weaker escalate in revenues from year to year than in a full period of 12 months, which may suggest a potential slowdown in demand. But sales continued to grow by 78%, which is not a compact feat.

Meanwhile, NVIDIA still uses a number of competitive advantages, from deep relationships with a vast number of installed users, to a reserved technology, which means that many of its systems cannot be directly compared with those offered by rivals.

But although I see the reasons for constant optimism that a recent decline in stock prices suggests that a wider market is much less confident in relation to NVIDIA action than a few months ago.

This autumn means that the share is currently trading in a profit ratio of 37. It is a much more attractive valuation than at the beginning of the year.

Still, it means good value? After all, the risk remains significant here.

For me the price is not Already Provide a sufficient safety margin to compensate for this risk, so I’m not ready to buy yet.

But NVIDIA shares are approaching what I think is an attractive price. I will be careful so that if the price is right, I am ready to buy.