Stocks had a mixed session on Thursday. S&P 500 increased 0.3% to 3,967, while NASDAQ fell 0.3% to 11,785.
Investors are closely watching August’s jobs report, which will be released on Friday. Initial jobless claims declined to 232,000 for the week ended August 27. This fueled concerns of a rate hike this month at the Federal Reserve’s upcoming meeting.
Meanwhile, the US government ordered Nvidia Corporation (NVDA) to halt sales of their top chipsets to China and Russia.
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In the UST Market: 2 year/ 10 year inverted 35 bp. 5 year/ 30 year inverted once again, five basis points right now. These are reliable signals of economic trouble. Risk manage accordingly.
— Jeffrey Gundlach (@TruthGundlach) August 31, 2022
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NVDA was down 8% today as the US government isn’t going to allow them to sell their top chipsets to China and Russia.
The company focuses on personal computer (PC) graphics, graphics processing unit (GPU) and also on artificial intelligence (AI). It caters four large markets, namely: Gaming, Data Center, Professional Visualization and Automotive. Among these, Datacenter and Gaming gives NVDA two avenues for exceptional growth.
The stock hit an all-time high of $346 last November, and closed at $139 today. Profit estimates will likely be cut further, and 2022 profits will be lower than last year (estimates are currently $3.39 vs $4.44).
This reminds me of when I last sold NVDA. It was July 2019. Qtrly profit growth was negative. The stock was around $43 after splits.
I ended up buying back in February 2020 around $66 after profit growth was +136% the prior qtr.
My lesson learned was this stock has great technology and should be a buy and hold investment for me.
– David Sharek, Founder of The School of Hard Stocks
NVDA is a top holding in the Growth Portfolio and Aggressive Growth Portfolio. David Sharek’s Fair Value moves down from a P/E of 50 to 35.