What Should You Do with Nvidia Stock? 3 Strategies for Right Now

What to do about shares of Nvidia? I see daily in the comments, questions from investors of what to do. Some have massive profits and don’t know whether to sell, others are wondering if it’s too late and don’t want to get caught in a bubble. Trying to estimate a fair price target for shares of Nvidia, investors have to wonder if the company can keep up this breakneck speed. Nvidia more than doubled sales last year, grew revenue by 126% to $60.9 billion, a pace you have to think slows down …but management estimates a $1 trillion market opportunity in AI, autonomous and digitalization . A trillion dollars market revenue per year, that’s still a lot of runway for growth for a company dominating the market and still at $61 billion a year in sales.

In Morningstar data, we see shares of Nvidia have traded at a five-year average of almost 20-times sales and 69-times earnings. That’s very much below where they’re at now; a price-to-sales of 41-times and PE ratio of 76-times but also well above the low-points of 13-times sales and 60-times earnings over the last five years.

So if we apply the estimates for $3.61 earnings and $160 billion revenue to the average valuation multiples, we get an Nvidia price forecast between $130 a share (20X Revenue times $160 billion and divided by shares outstanding) and $249 each (69X PE times $3.61) for the end of next year. We could use the current valuations of 40X sales and 76X earnings for a range of $258 to $274 per share but with the slowing growth I think it’s safe to expect these valuation multiples will come down a little. At the low point, if we use the lowest PE and price-to-sales ratios over the last five years, we get Nvidia estimates between $84 which is 13-times the $160 billion sales and $216 per share or 60-times earnings. Most of these are slightly or well above the current price so as long as Nvidia keeps performing as expected, let alone beating expectations, then it should continue to produce returns.

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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through dividend stocks, investing and ways to make more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.

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[Aarrenrhonda]

Strong BUY. Still early innings. NVIDIA is the dominant leader in AI and the preferred technology partner globally. Even w new competition on the horizon, NVIDIA is far ahead of the competition. 85% market share. 76% margin. Unrivaled demand for new Blackwell chip. Demand far exceeds production for Blackwell through to 2025 and beyond. No competitor has anything close to Blackwell. And forward P/E is about 33 (cheap for a high growth stock). Buy this stock and wait. You will be rewarded.

[AndersonFair-cybb]

The main focus for markets now is Nvidia, which has powered a large chunk of the S&P 500’s recent earnings. Nvidia’s stock, up more than 100% this year, rose 2.5% in New York on Monday, sending the Nasdaq 100 index to another record high. I'm still looking for companies to make additions to my $350K portfolio, to boost performance. Here for ideas...

[DonaldMark-nese]

I believe investors should focus on under-the-radar stocks, especially given the present rollercoaster nature of the stock market. 35% of my $270, 000 portfolio consists of collapsing stocks that were previously respected, and I don't know where to go from here.

[KarlyNoorda]

AI stocks will dominate 2024. Why I prefer NVIDIA is that they are better placed to maintain long term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA. I'll also take any other recommendations you make.

[DebeaumontCadiz]

*Amazing video, you work for 40yrs to have $1M in your retirement, meanwhile some people are putting just $10K into trading from just few months ago and now they are multimillionaires*

[EricMoore]

Downturns and rollover will make you 100x than upturns. Selling is always fast. Going down you go in a lift while going up you go in a stairs. But timing is very important here

[VanChuong-ongh]

I agree that many people are considering NVDA as the "Stock of the year." However, I'm curious about which stocks could potentially become the next META in terms of growth over the next decade. I've allocated $200k for investment, looking for companies to make additions to boost performance

[jameswood]

AI stocks will dominate 2024. Why I prefer NVIDIA is that they are better placed to maintain long term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA. I'll also take these other recommendations you made.

[Cottoncandyh]

I have $170K invested in NVIDIA right now. I only got into stocks to try and make some money to help afford medical infusion treatment that I need. I know it's a risky game, especially since I'm not closely monitoring the market. I just don't want to make any wrong moves. Should I hold or sell and buy back later? I'm genuinely seeking advice.

[lihuabenchen]

Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 with markets tumbling, soaring inflation, and banks going out of business. How are other people in the same market raking in over $200k gains with months, I'm really just confused at this point.

[Elenavazquezwells]

I know at some point a bull market ends and a bear begins, it goes on and on... I have a 7 figure ballpark goal and I intend spreading across maybe 50k - 150k on plummeting stocks, my question is how can I know when a market bottom has been reached?

[fedorinovsubdivision]

Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 and first half of this year with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?

[DanielPanuzi]

I'm planning to invest $150, 000 of my savings into some stocks to ensure safety in case there is a recession. What is the best investment strategy to use?

[livingart]

I’m buying more Nvidia. I spent the last 4 weeks studying the company and I’m happy! 😊

[ravenjacobs]

I own some shitcoins and I would like to switch those to Nvidia stocks. Of course, the price is crazy booming right now, didn't dared to buy the stock when it was sub 6/700. Since the split is incoming, I've seen news all over the internet right now. Could this be one of the last trains to hop on for Nvidia? And investing, I mean long-term investing. Few years at least.
I know no one can predict the market, so I'm mostly curious about your thoughts on my take.

[CaseyNeistat]

To be successful in markets, traders should understand the crossover between asset classes & liquidity flow. Victoria Wiezorek focuses on Multi-asset trading, a single strategy to manage risk, profit, and the code or the actual decision -making across multi-asset classes. Her skills set is top notch.

[aaronoconnor]

Nvidia will hit 150 to 200 a share next year so if it hits 100 or lower its a buy

[alexandraesther]

This seems like the worst period. Even the market are now very unpredictable. Started investing recently when the market prices were a bit high, today I am more than 60% down!..

[NeoSoulCrew]

The PE ratio is still good, surprisingly...dip buy

[JamesBullock-flly]

This is a GREAT TIME to buy!!!! Hope it drops lower!!! I’m in for the long haul!!! Thinking $110 and⬇️