I Can't Stay Quiet on Nvidia Stock (NVDA) Crashing Any More
TLDRThe video discusses the recent downturn in Nvidia's stock, which has dropped by over 15% in the last month. Despite this, the presenter remains bullish on Nvidia, asserting that it is the most powerful AI company on Earth due to its pivotal role in the next Industrial Revolution through its AI chips. The presenter explains that the stock's decline is not indicative of the company's potential, highlighting that Nvidia's shift to AI for data centers is not the beginning of the end but rather the end of the beginning. The video also touches on the presenter's personal investment journey with Nvidia, emphasizing the importance of not letting others dictate one's investment decisions and the need for a long-term perspective when investing in volatile tech stocks. The presenter concludes by reiterating their positive outlook on Nvidia's future, suggesting that understanding the underlying science behind the stock can help investors navigate short-term fluctuations.
Takeaways
- 🚀 Nvidia is considered a powerful AI company, with its chips driving the next Industrial Revolution in various sectors like large language models, humanoid robots, supercomputers, and self-driving cars.
- 📉 Nvidia's stock price has recently declined by over 15% in the last month, leading to speculation about the company's future.
- 🤔 The decline in stock price is partly attributed to Super Micro Computer's (SMCI) stock drop, which is a long-term partner of Nvidia and uses its GPUs in server solutions.
- 📊 A chart from Main Street Data shows Nvidia's quarterly revenues by business segment, highlighting a strategic shift from gaming GPUs to AI accelerators and networking solutions.
- ⏳ The comparison of Nvidia's year-over-year growth is currently favorable due to low baselines from previous quarters, but this will change after the upcoming earnings report around May 22nd.
- 📈 Despite recent dips, Nvidia's stock has shown a significant increase over the past year, tripling in value and demonstrating a long-term upward trend.
- 📉 The stock has experienced significant drops of 10% or more 31 times, and even crashes of 80% on two occasions, yet it has consistently recovered and reached new highs.
- 💡 The speaker emphasizes the importance of not letting others dictate investment decisions, having learned from personal experiences with Nvidia's stock fluctuations.
- 💸 The speaker advises not to be afraid to stay on the sidelines, especially in a volatile economy, and to build positions over time rather than going all in at once.
- 📚 Consuming content from a variety of high-quality sources is recommended for a balanced view of the market, as no single source can provide a complete picture.
- ⚖️ The speaker stresses the importance of risk management and not blindly trusting anyone, including themselves, for investment advice.
- 🌟 Nvidia continues to be seen as a leader in AI technology, with ongoing product releases and contributions to the field of generative AI, such as the recent delivery of the H200 GPU.
Q & A
Why has Nvidia's stock price been crashing recently?
-Nvidia's stock price has been affected by a sharp decline, dropping over 15% in the last month. This is partly due to Super Micro Computer Inc. (SMCI), a company that uses Nvidia GPUs in their server solutions, experiencing a stock price drop of over 20% after not pre-announcing their earnings, which is unusual and led to market concerns.
What is the significance of Nvidia's pivot from high-end GPUs for gaming to AI accelerators and networking solutions?
-Nvidia's pivot reflects the shift towards AI and data centers, which is part of the next Industrial Revolution. This strategic move is crucial for the company's long-term growth as it addresses the increasing demand for AI technology in various sectors, including large language models, humanoid robots, supercomputers, and self-driving cars.
How has the pandemic impacted Nvidia's supply chain and performance?
-The pandemic caused supply chain issues that, along with Nvidia's strategic pivot, led to underperformance for four quarters in 2022 and 2023. This period of underperformance is a significant factor in the company's year-over-year growth numbers when compared to the previous year's lower baselines.
What is the author's personal experience with investing in Nvidia stock?
-The author has been holding Nvidia stock for over 8 years and has experienced the stock's volatility, including multiple significant draw-downs. Despite the challenges, the author emphasizes the importance of not letting others dictate one's investment decisions and learning from personal experiences.
Why did the author decide to join Delete Me, and what does the service offer?
-The author joined Delete Me after discovering that his personal data was being sold by online data brokers. Delete Me is a subscription service that removes personal information from hundreds of online data brokers, providing a privacy report after a week and regularly rescanning websites to maintain privacy.
What is the author's long-term outlook on Nvidia's stock?
-The author maintains a positive long-term outlook on Nvidia's stock, believing that Nvidia is the most powerful AI company on Earth and that its AI chips are essential for the next Industrial Revolution. Despite short-term volatility, the author is focused on the company's continuous innovation and its role in shaping the era of generative AI.
How has Nvidia's stock performance been historically, and what is the significance of this for investors?
-Historically, Nvidia's stock has experienced significant draw-downs, including drops of 10% or more 31 times, 20% or more 18 times, and even crashes of 80%. Despite these downturns, the stock has shown a remarkable ability to recover and reach new highs, demonstrating the importance of long-term holding and understanding the underlying business fundamentals.
What advice does the author give to investors regarding their investment strategies?
-The author advises investors to avoid making impulsive decisions based on short-term market movements, to not blindly trust others with their investment choices, and to build positions over time rather than going all-in at once. He also emphasizes the importance of diversifying information sources and critically evaluating different viewpoints.
How does the author suggest investors should approach the consumption of financial content?
-The author suggests that investors should consume content from a variety of high-quality sources with consistent points of view. He also recommends subscribing to channels that post valuable content regularly and unsubscribing from those that do not, to ensure that the information received is both valuable and relevant.
What is the significance of the shift to AI for data centers in Nvidia's business strategy?
-The shift to AI for data centers represents a strategic move by Nvidia to capitalize on the growing demand for AI technology. This move is expected to drive the company's growth in the long term, as AI becomes increasingly integral to various industries and technological advancements.
How does the author justify his continued optimism about Nvidia's future despite recent stock price declines?
-The author justifies his optimism by pointing to Nvidia's innovative products, such as the A100 and H100 data center GPUs, and the company's role in the next Industrial Revolution. He also notes that the stock's recent decline follows a period of significant growth and is part of the natural volatility of high-tech growth stocks.
Outlines
📉 Nvidia Stock Decline: The Beginning or an Overreaction?
The paragraph discusses the recent downturn in Nvidia's stock price, which has dropped by over 15% in the last month. The speaker questions if this signifies the end of Nvidia's success or if the company's best days are still ahead. They clarify that they were not wrong about Nvidia's potential and provide context by discussing Super Micro Computer's stock performance and its partnership with Nvidia. The paragraph also includes a brief overview of Nvidia's business segments and a comparison of their year-over-year growth numbers. The speaker suggests that the current downturn is a temporary phase and not indicative of the company's long-term prospects.
📈 Nvidia's Resilience and Long-Term Growth
This section of the script provides a historical perspective on Nvidia's stock performance. Despite experiencing significant downturns, including drops of 80% during the dot-com bubble and the global financial crisis, Nvidia has shown a remarkable ability to recover and grow. The speaker shares their personal experience with investing in Nvidia, emphasizing the importance of not letting others dictate one's investment decisions. The paragraph also highlights the company's strategic shifts, such as the introduction of the A100 and H100 data center GPUs, and the speaker's decision to focus on Nvidia and its competitors rather than following other investment trends.
💡 Investing Insights: Handling Volatility and Building a Diverse Perspective
The final paragraph offers investment advice and the speaker's personal outlook on Nvidia. They emphasize that while Nvidia's stock can be volatile, it's essential for investors to understand the underlying business and technology driving the company. The speaker advises not to be swayed by short-term fluctuations and to build positions over time. They also stress the importance of not blindly trusting any single source for investment advice, including themselves, and recommend diversifying one's sources of financial information. The speaker reiterates their belief in Nvidia's potential as a leader in AI technology and its role in the next Industrial Revolution.
Mindmap
Keywords
💡Nvidia
💡Stock Crash
💡AI Chips
💡Super Micro Computer
💡Earnings Pre-Announcement
💡Quarterly Revenues
💡Supply Chain Issues
💡Data Center
💡Investment Volatility
💡Personal Data
💡Compound Annual Growth Rate (CAGR)
Highlights
Nvidia is considered the most powerful AI company on Earth due to its pivotal role in the next Industrial Revolution with its AI chips.
Nvidia's stock (NVDA) has experienced a significant drop, falling by over 15% in the last month alone.
Super Micro Computer, a company that builds server and storage systems, is a long-time partner of Nvidia and has seen its stock fall by over 20%.
Nvidia's shift from high-end gaming GPUs to AI accelerators and networking solutions for data centers was affected by supply chain issues from the pandemic.
Nvidia's year-over-year growth numbers appear strong due to comparison with underperforming quarters from the previous year.
The upcoming earnings report on May 22nd will be the last time Nvidia's quarterly numbers are compared to low baselines, indicating a shift in expectations.
Nvidia's stock performance has been volatile, with drops of 10% or more occurring 31 separate times since its IPO.
Despite significant drops, Nvidia's stock has shown a remarkable recovery and growth over the long term, outperforming the S&P 500.
The speaker has personally held Nvidia stock for over 8 years and emphasizes the importance of not letting others dictate your investment decisions.
Investors are advised not to go all in at once but to average into positions for better risk management.
The speaker recommends not blindly trusting anyone, including himself, for financial advice and to curate a diverse set of high-quality information sources.
Nvidia's release of new products and services, such as the H100 Data Center GPU, signifies its ongoing commitment to the era of generative AI.
The speaker emphasizes the importance of understanding the science behind stocks rather than reacting to short-term market fluctuations.
Nvidia's stock price can be volatile, but the company's continuous innovation and product development position it strongly for the future.
The speaker shares a personal anecdote about his investment in Nvidia in 2016 and the lessons learned from market advice and timing.
The speaker's long-term outlook remains positive on Nvidia, believing it to be the most powerful AI company due to its role in the upcoming Industrial Revolution.