I own shares for a long time nvidia Some have become grandly wealthy. That’s not surprising: Nvidia stocks have skyrocketed 1,467% In the last five years alone.
In other words, Chip Company is currently heading a market capitalization of 3.4trn. That’s an immeasurable amount for many people.
But, as strange as it may sound, does Nvidia shares still have more potential profits than that?
Today’s ratings may be low
At this time, Nvidia’s stock is trading 45 times more revenue.
That may not sound cheap. However, it is not exceptional with recent growth stocks. compared to Palantir Prices and return rates of 534, Nvidia may seem very cheap.
Why do investors price Palantir stocks like that? Obviously, they expect future income to exceed today’s income, which could help justify such an assessment.
But the same applies to Nvidia. It is already a very profitable company. Last year, net profit was $730 billion. That was a 56% net profit margin. It’s very appealing. And as Nvidia expands its business further, it may be able to reap more economies of scale and increase its profit margins.
How about revenue? Last week, Nvidia announced its first quarter revenue of $44 billion. It is not only an absolute word, but also represents a 69% leap from the same period last year.
Net income did not grow at that rate, but it showed a 26% growth year-on-year. In one-quarter of cases, including important geopolitical and tariff uncertainties that Nvidia is directly involved, that is a strong performance in my view.
I’m seduced, but not enough to buy
Things could get even better from here. Recent turbulence could provide long-term benefits of allowing Nvidia to better spread business across multiple regions and helping fuel growth. The demand for tips is very high. AI has helped drive that, but it may just really start from an AI demand perspective.
With its unique design, large customer base and strong industry position, Nvidia appears to be looking to benefit from such growth, as recent business performance shows. If it is converted to future revenue growth, NVIDIA’s stock price could rise significantly from here.
However, I continue to be forced into NVIDIA investment cases, but the current stock price does not provide enough safety margin for my comfort as an investor.
AI investments could grow from here, but they could also be a flash of light within the bread. Over time, I hope that more competitors will try to eat up Nvidia’s share. I still see it as a potential bargain. However, the prices are not suitable for me yet, so I’ll continue to watch without buying them, at least for now.