Sell Nvidia or hold on?This is what experts say | Wilnesh News
Driven by the artificial intelligence craze, Nvidia has achieved astronomical growth, soaring by more than 200% in 2023 alone. Although the stock fell more than 5% on Friday and another 2% on Monday, it’s still up about 73% this year. In fact, many people are still bullish on Nvidia and believe that its stock price has more room to rise. But after an exciting explosion of revenue and profit forecasts, some may be starting to question the long-term sustainability of its growth rates. Is it time to take profits, even partial gains – or should investors stay the course? Here’s what people who currently own Nvidia stock are doing or planning to do. Sell at least some Some people say it’s time to sell, or they’ve already sold some of their Nvidia stock. Vahan Janjigian, chief investment officer of Greenwich Wealth Management, said that until recently he held a “significant position” in Nvidia. “But I’m a little nervous because I do think the stock is overvalued, especially when you look at it from a price-to-sales perspective. It sells for about 35 times sales, which is in line with some other tech companies. “Comparatively, the number is very high,” he told CNBC’s “Asia Roadmap” on Tuesday. “If you believe Nvidia can grow revenue 30% a year, I think it can do that for at least a few years, but it has to do that for almost 15 years to recoup your investment in the stock, assuming 100% profit margins,” he added. Janjigian now prefers to invest in Nvidia through exchange-traded funds. He said he holds “significant” positions in three of the funds: the SPDR S&P 500 ETF Trust, the Invesco QQQ Trust Series 1 and the VanEck Semiconductor ETF. He noted that Nvidia has a heavy weighting in all of these companies, accounting for 26% of the VanEck Semiconductor ETF. “I don’t feel like I need to own the stock alone anymore,” he said, adding that owning both the stock and the ETF gave him “too much exposure” to Nvidia. Paul Gambles, managing partner of MBMG Family Office Group, told CNBC Pro on Monday that he will now sell Nvidia. He said that based on history, Nvidia’s stock price could fall by 50% to 90% “very soon.” He added: “While it’s almost impossible to tell whether this will happen now or next year, precedent suggests it’s time to worry – the longest period without an ‘incident’ was 2012 to 2018.” Gambles said, Investors should buy puts when they are cheaper, as Nvidia’s sometimes high volatility “could be ideal” for options strategies. Options allow you to bet on whether you think an asset will rise or fall. You can buy or sell option contracts and implement various strategies. If the market falls, buying “put options” can be profitable for investors. On the contrary, if the market rises, it is worthwhile to buy a “call option”. This is a risky form of investing and is therefore suitable for experienced investors. Here’s how it works. “If they are not protected and hold NVDA, and if pricing now makes puts unattractive, then they should probably develop an exit/profit-taking/position management strategy, including limit sells and stops,” Gambles said. “Loss ladder.” “Sell limit” usually attempts to sell the stock at a specific price, while “stop loss” refers to placing an order to sell the stock immediately to reduce losses when the price falls below a specific price. Ladder trading, in this case, refers to the strategy of placing a number of sell orders at different price points. “Even if we’re right, it’s up 100% in six months, so while the momentum continues and you don’t want to knee-jerk get out, holding NVDA right now is the way to go,” Gambles said. Playing with fire.” Jordan Cvetanovski, portfolio manager at Sydney-based Pella Funds Management, told CNBC Pro that he had already taken profits on some Nvidia shares, even before the recent share price decline. “There’s some rebalancing,” Cvetanovsky said. “There are definitely some exciting wake-up calls.” “So there may be a situation where things have gone a little too far, but that’s just from a trading perspective, but long term I’m not worried about it.” “But in the short term I’m a little concerned. So we It’s gone down a bit, but not as much as you might think,” he said. Another person less optimistic about Nvidia is Craig Johnson, chief marketing technician at Piper Sandler. He said the stock has gone “parabolic,” meaning its momentum — or the speed and speed at which prices are rising — has accelerated. “People are going to have to do some rebalancing. You’re definitely going to lose some momentum when this kind of action happens. I think it’s a great company, but buying it after so much volatility in this situation is A dangerous stock. For a very short period of time,” he told CNBC’s “Worldwide Exchange” on Monday. Hang in there Navellier and Associates’ Louis Navellier remains fairly optimistic and says now is definitely not the time to sell any Nvidia stock. “No, no, because I don’t have another company that’s growing sales at 200%. And it’s trading at about 26 times forecast earnings and it’s a monopoly,” he told CNBC Pro last week. Navellier believes that Nvidia’s pricing is “reasonable” considering its expected revenue and its “monopoly position” in graphics processing units in the artificial intelligence market. “Obviously, its dominance isn’t going to last forever. You’re going to have a dilemma like Apple’s, you know, sales are going to be so down and margins aren’t going to expand,” he said. “But as long as sales are strong and profits are expanding, I’ll keep doing it.”
