I always say "Don't jump in front of a freight train" (Patreon)
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Well NVDA popped up huge in after market after earnings. The company was already outrageously valued - but this AI narrative is really something.
$384 in after hours is insane... nearly 1T market cap... see below
Earnings beat
- EPS: $1.09, adjusted, versus $0.92 expected
- Revenue: $7.19 billion, versus $6.52 billion expected
- Revenue up 14% vs last year
Nvidia is on the verge of becoming the world's first trillion-dollar chip company.
The company's stock price has been on a tear in recent months, and it is now valued at over $940 billion. This is more than Tesla, the world's most valuable automaker.
I was hedged on META, MSTR, CLSK, and NVDA. I covered META and MSTR, but I decided to hold off on covering NVDA and CLSK. I felt that there was more downside to come with the debt ceiling situation.
I also felt that NVDA was already overvalued. I had recently hedged my position by buying NVDS at $317.50.
My plan now is to wait for NVDA to mean revert. This means that I expect the stock price to eventually fall back to its fair value.
I am hedged, which means that I did not lose money on my NVDA position. However, I did leave a lot of money on the table.
I expected a face-ripping rally once the debt ceiling was resolved, but I did not expect this.
The lesson I have learned is to never short things like BTC and TSLA. I am now adding NVDA to that list.
I believe that NVDA is overvalued, and I expect the stock price to fall back to its fair value in the future. BUT if the AI narrative continues to fuel the NVDA fire - it may just hold up here at that 1T valuation.
NOTE: This will be good for my other AI holdings TSLA META should all pump on this news tomorrow.
260% in 224 Days