Is it time to short NVDA ?

You first

My EJ account had this to say

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Key Developments
11/22/23: We are downgrading shares of
NVIDIA to a Hold from a Buy and removing it
from the Stock Focus List. While we cannot
deny NVIDIA has the best growth story
within technology, we think expectations
have finally begun to catch up to the stock.
The company will likely remain the pinnacle
of the current generative-AI boom due to
a lack of alternatives for the company's
chips. However, with exceptionally strong
demand, significant market share, and no real
alternatives for its products, we believe the
company is experiencing peak demand. In
our view, this will make it more challenging
for the company to continually outpace
expectations and drive the stock meaningfully
higher. We believe NVIDIA's positioning in
and dominance of AI chip markets is well
understood by the market at this point. We
continue to feel comfortable with long-term
investors holding NVDA shares within a
diversified portfolio. However, near-term
expectations are very high. As a result, we
are reluctant to recommend that investors add
to positions at this time.

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Here is what happened since they downgraded to HOLD

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Investor on CNBC said that NVDA reminds him of CSCO in 1999/2000

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I do not think I would trust someone using an example from a quarter century ago.

The market and the way it reacts has changed just a little since then.

Short it all you want. I would not short a leading AI stock though, until something negative slows down that sector. AI growth has just started, IMO.

Slackster is right about SMCI, it is up 800+% over the last 12 months. It is overvalued, but I would still not short that either. It is in lala land and may pop for 20% gain for no damn reason.

You don't bet against a winner that's on a win streak. Just IMHO.

Heck no

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Fill me in. How is it not expensive when looking at it’s PE ratio?

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It’s trading around a 35x forward PE. The 5yr average forward PE is 42x. You’re paying less for future earnings now than you have on average for the past 5 years.

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It’s trading around a 35x forward PE. The 5yr average forward PE is 42x. You’re paying less for future earnings now than you have on average for the past 5 years.

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Made up metric. Yes- people use it, but it implies you have a crystal ball and know what earnings will be. It’s literally just a consensus guess for the growth of earnings. Sure, it’s an educated guess from teams of WS analysts but even they get it wrong. A lot. And none of them would ever be overly optimistic, right? Then comparing forward PE between company x and y is assuming the methodology used to derive each projection was the same and accurate.

Can you tell I hate forward PE?

That said, I would not advocate shorting either. You know, irrational > solvent… maybe if you bought time very far out, but the premium on that is probably expensive and not worth it anyway. Someone will time this bubble popping but majority will lose.

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Yea go ahead and short it and let us know how it turns out. Earnings are next week but go ahead and short it.

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Considering the run that the stock has been on, I would be just as nervous to be long going into earnings as I would to be short going into earnings.
If they disappoint, or more importantly give weaker than expected guidance, look out below.

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You may be right. So to short NVDA, what method would you use, a straight short (borrowing shares) or using an options strategy? Do you have experience in utilizing either or both?

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NVDS is an easy way to short.
1.25 weighted short.

You don't bet against a winner that's on a win streak. Just IMHO.

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This. I added a little NVDA this week. They are dominant with their product. The run will end at some point, but their financials and product dominance have room to run. Not expecting the growth rate to stay as hot as it has been, but it will grow this year. I will be happy if it only grows 10% over the next year.