Tech Giant In One Chart: The Higher NVIDIA Stock Price Goes, The Cheaper It Gets
Common logic might suggest that as the stock price climbs, so would the P/E ratio, making the stock more expensive. But NVIDIA's earnings have been growing at a rapid pace, outpacing the stock price increase. Nvidia's Q4 earnings soared beyond top and bottom lines expectations, with revenues and non-GAAP EPS coming in at $22.1B (up +265% y/y) and $5.16 (up +486% y/y), respectively. As a result, the P/E ratio actually decreased, indicating that the stock is getting cheaper relative to the company's earnings.
With cloud hyperscalers - Amazon, Microsoft and Alphabet - guiding for an acceleration in AI Capex spending in their quarterly reports last month, Nvidia's strong performance is likely to continue. Backlog growth indicates strong unrealized revenue growth potential ahead, providing growth visibility in the coming years. For Q1 FY2025, Nvidia's management is guiding for revenues of $24B (vs. street estimates of $22B), which means the astronomical growth will continue next quarter.
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Sam2101 : When the market is cheering, be fearful. There are bound to be dips in weeks to come !! $NVIDIA (NVDA.US)$
AllenWhight Sam2101: no no no
人间走一波 Sam2101: I've been afraid since I was over 400
Sam2101 人间走一波: same story here, bro
Jack1979 : So are you buying NVDA?
Jack1979 Sam2101: The direction of 750 yuan
willing Ferret_7806 : As long as he is supported by his performance, what is he afraid of?
10baggerbamm Sam2101: party pooper
CheungAlan : So use Forward P/E and PEG ratio, not LTM P/E …
Sam2101 10baggerbamm: reality checker
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