Our Stock of the Week is NVIDIA (NVDA). NVDA is the driving force behind the infrastructure needed for AI. It dominates the semiconductor market and is at the cutting edge of innovation.
Nvidia posted another robust earnings report on May 28, but after gapping higher on the news, it has fallen back and closed that gap. There is a cup-with-handle pattern forming, and it will likely pop higher on any positive news about tariffs or trades. It has already priced in increased restrictions on shipment of chips to China.
The company expects to grow eps to $4.37 in the FYE January 2026, which is growth of 46%, and then an additional 31% in FYE 2027. It sells with a trailing PE of 42, which makes it the cheapest of the Magnificent Seven names on a PE/Growth basis. The semiconductor sector is generally viewed as cyclical, which is why it has cheaper valuations, but there are many indications that the the current AI cycle is still at a fairly edge stage.
There are 41 analysts following the stock with 36 buys, four holds, and one sell. The average target price is $171.62, which is 27% higher than the current price. The high target is $210 from Truist. Following the most recent earnings report, numerous analysts raised their target prices.
My game plan is to start a position around the current price of $135 and then look to average in further weakness. If it moves back up the $140 level, I’ll look to be more aggressive for a breakout play.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in NVDA. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
