One quarter does not make a career.
While Nvida is warning that their revenues are expected to be lower this quarter, don’t run from this stock if you own it at much lower prices. Graphic processors are going to be with us for a long time. This is a long term trend in the IT space and Nvida is top dog in that space. Their processors are the gold standard for many users.
Investing in stocks requires successful investors to deal with the regular ups and downs of the stock market. This is no different than analyzing their revenues. Like Jack and the Bean Stock, sales don’t grow to the sky and usually it doesn’t happen in a “straight regression line”. There are ebbs and flows.
If you look at the attached chart of Nvidia’s quarterly sales, it seems like they are growing straight up to the sky. Don’t be fooled. Successful companies can only do this for so long. There will be setbacks.
If you’re expecting a straight upward climb in Nvidia, it’s best to get out of Nvidia now and into a CD (certificate of deposit). CD have a steady climb, but at a much slower rate (slope). But the cost will be losing Nvidia’s future returns.
Personally, I am on-board and don’t plan to sell out. I’ve held Nvidia for ten years and I’ve seen unbelievable growth. Their return on equity has been over 30 % for 5 of the last 6 years. The other year was greater than 20%.
Be careful when the market pundits and news services put out this kind of short term news. Their goal is shock and awe. It can make you leave “a gold mine” and move to a rock quarry.
Be smart, be well-read, be aware and be successful.
