Over the past few days, the financial world has entered a new starting start in the world of artificial intelligence (AI). Chinese company Dibsic Shock waves are sent all over the world after a model is released closer to ChatGPT.
The main reason is that investors are the pan Nafidia(Nasdaq: nvda). These claims have left investors who are grateful to their heads, and wondering whether the newest NVIDIA structure is worth the huge price.
As a result, NVIDIA’s shares entered into a periodic period for a few days. Is this an opportunity to buy, or can NVIDIA shares turn much less?
Below, I will analyze some interesting trends in NVIDIA shares and take the case for the direction that I think can be to the stocks.
The graph below shows multiple sales seen in NVIDIA shares in the days after the arrival of Deepseek. Although you think the declines around this size say everything, there is something interesting in the background.
When the stock price moves, as well as the value of the company. In the case of NVIDIA, the company’s CuRater’s share price led to up to $ 600 billion of the lost market value.
Since the maximum NVIDIA market has decreased, therefore, also, the complications of the evaluation. As of the writing of these lines (January 29), the NVIDIA profit price (P/E) is 30.1.
Below, I will dive into the reason for the importance of this contraction in the complications of the evaluation and what the date proposes that can happen after that.
Photo source: Getty Images.
In the table below, I summarized P/E to the NVIDIA striker from the end of the quarter last year.
category
10/31/2023
1/31/2024
4/30/2024
7/31/2024
10/31/2024
present
The future price of profits (P/E)
24.5
30.4
35.7
44.6
33.9
30.1
Data source: Yahoo! finance.
The last time she was the Nvidia P/E striker, which hovered about 30 January. It is important to note this because in January 2024, the market value in NVIDIA was $ 1.5 trillion – approximately half of what it is today.
Looking at the equivalent between the P/E striker from now to a year, you may tend to think that NVIDIA shares will rise – as was the case throughout 2024. While these dynamics are what history can happen, there is some slight difference to consider this Bitter.
Since the current Mountion P/E of NVIDIA is in line with the place it was a year ago despite the doubling of the company’s market value, this means that the Wall Street analyst also expects to double the profits of NVIDIA.
I looked at a different way, if the maximum NVIDIA market doubled, but the company’s profits were not accelerating at a successive pace, the NVIDIA striker has expanded. This is a concept known as evaluation expansion.
But as I indicated in the foreground, the Deepseek story wondering what the demand trends will appear in Amnesty International – especially GPU), which is NVIDIA bread and butter.
Frankly, I will not be surprised by the vision of some analysts starting to arm their revenues and profits for NVIDIA. Although this does not mean that NVIDIA should be considered exaggerated, I believe that investors need to allow industry experts to set Deepseek news and improve their models accordingly.
In other words, the current NVIDIA striker is almost identical to the place where it could have been seen as a coincidence, as it is certain that the profit estimates will change – and thus question the importance of the P/E ratio to the front is now.
At a broader level, although I am confident that NVIDIA will remain a pioneer in the artificial intelligence race as graphics processing units should continue to play an important role in the development of technology. Just how much? This is a billion dollar question.
So, although history may suggest that the value of NVIDIA has doubled this year, I am thinking twice. In the long run, I think there is still a lot of value that must be recognized in investing in NVIDIA shares. I don’t think the shares will double again in 2025.
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