Chipmaker
Nvidia
has
dominated
headlines
over
the
past
year,
especially
after
its
shares
logged
an
astronomical
240%
rise
in
2023.
Its
popularity
shows
little
sign
of
abating,
and
although
the
stock
was
flat
last
week,
it
is
still
up
by
nearly
80%
over
the
year
to
date.
FactSet
data
shows
that
most
analysts
remain
bullish
on
Nvidia.
Of
the
59
analysts
covering
the
stock,
52
give
it
a
buy
or
overweight
rating,
while
7
give
it
a
hold
rating.
Analysts’
average
price
target
is
$1004.89,
giving
it
nearly
12%
potential
upside.
The
substantial
rise
in
Nvidia’s
share
price
has,
however,
has
raised
questions
about
whether
those
not
already
invested
should
buy
the
stock
now,
or
wait
to
see
if
its
price
drops.
CNBC
Pro
spoke
to
two
fund
managers
who
have
differing
opinions.
Buy
Nvidia
Trent
Masters,
portfolio
manager
at
the
Sydney-based
Alphinity
Investment
Management,
has
a
buy
recommendation
on
Nvidia,
even
as
he
acknowledges
that
it
is
“hard
to
buy
a
stock
that
has
already
gone
up
a
lot.”
“I
personally
missed
the
initial
run
in
Nvidia
and
only
bought
the
stock
when
it
rose
to
$390
last
May
after
its
results.
It’s
probably
one
of
the
hardest
things
I’ve
done
in
the
last
10
years
to
buy
a
stock
that’s
already
up
so
much
because
it
feels
like
you
could
be
making
a
mistake.
But
I
think
investors
just
have
to
view
these
things
objectively,”
he
said.
“We’ve
already
seen
a
four-fold
expansion
in
its
earnings
to
$29
per
share,
which
is
something
we’ve
not
seen
before.”
Masters’
only
concern
is
that
the
chipmaker
risks
losing
some
market
share
to
competitors
like
Advanced
Micro
Devices
in
the
longer
term.
He
remains
bullish,
however,
given
demand
for
the
chipmaker’s
suite
of
products,
strong
market
share
of
over
50%
in
the
graphic
processing
units
(GPUs)
space,
and
the
sustainability
of
its
earnings.
Hold
off
Nvidia
Adam
Coons,
portfolio
manager
at
the
U.S.-based
Winthop
Investment
Management,
holds
a
different
view.
Acknowledging
that
Nvidia
is
a
“great
company,”
that
is
effectively
operating
a
“monopoly”
in
the
AI
chipmaker
segment,
he
has
been
reducing
his
holdings
in
the
stock
“Nvidia
is
a
company
that
ran
too
far
too
fast.
We’ve
been
holding
Nvidia
through
the
rally,
but
we’ve
started
to
sell
because
the
current
valuations
are
inflated,”
Coons
said,
adding
that
he
still
has
a
position
in
the
stock.
He
is
now
waiting
for
Nvidia’s
valuation
to
“normalize”
a
little
before
increasing
his
holdings
once
again.
Metrics
he
is
using
to
assess
this
include
a
normalization
in
the
company’s
price-to-earnings
ratio
and
the
addition
of
more
revenue
streams
“that
can
justify
the
valuation
down
the
road.”
For
instance,
he
is
looking
at
an
annualized
revenue
growth
rate
of
near
50%
over
the
next
five
years
to
justify
the
stock
price.
“If
it
did
that,
I
would
absolutely
buy
more
stock.
I
probably
go
overweight,
but
I
need
to
have
a
little
bit
more
comfort.
Even
if
I
do
miss
on
some
of
the
upside,
I’m
fine
with
waiting
just
to
be
sure
that
I
am
paying
the
right
price
for
the
stock,”
Coons
said.
For
fiscal
year
2024,
Nvidia’s
total
revenue
rose
265%
from
a
year
earlier.
Despite
reducing
his
position
in
the
stock,
Coons
remains
cautiously
optimistic
on
Nvidia.
“Long-term,
it
is
definitely
a
company
or
a
stock
you
want
to
own.
I
just
think
you
need
to
be
careful
in
the
short
term
around
some
higher
volatility
and
some
bigger
swings,”
Coons
added.