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TOO LATE? Buy Nvidia AFTER the Split?!

Jun 11, 2024
At the end of this video, Winston will tell you if it's too

late

to buy Nvidia stock or if the 1 to 10 stock

split

is the right time to buy now and in case you've been living under a rock, Nvidia is the company that sells. computer chips, picks and shovels basically in this AI gold rush that just captured the market's imagination, the stock is up a whopping 150% so far this year and is now valued at $3 trillion, it's the second largest company on Earth, right after Microsoft. neck with Apple depending on the market movements that day is just to give you a bigger perspective than Tesla and Amazon combined and this huge increase in share price has led Nvidia to announce a 10-to-1 stock

split

this Monday and that will decree an increase in the price. of its shares, it will make them more attractive to retail investors who may not have more than $1,000 to shell out for a share and, after the split, Nvidia will basically have 10 times as many shares at a tenth of the share price, so if you have one Nvidia share, they will give you nine additional shares for free.
too late buy nvidia after the split
Bankers can't count and then you'll end up with 10 stocks, that's basically how it works and if you look at analysts like Dan IES, he says we believe. Nvidia is going to be a company with a $4 trillion wrist market cap and this is just the beginning and well, that's a 30% rally from here. Now some analysts are predicting a much bigger increase, such as another 230% rally from here, and Nvidia hitting $10 trillion. market cap in dollars like more than three times the size of an apple or Microsoft now, actually, it's not that hard to see why they say that if you just look at the numbers in the May earnings report, well, they're unprecedented, never before There was a company that had done this when I first read about it and then I wondered if they got a zero or something.
too late buy nvidia after the split

More Interesting Facts About,

too late buy nvidia after the split...

Is there a typo here in a single year? In one year, they increased their profits from 2 billion to 15 billion, that's a 62. 8% increase and revenue increased 260% to 26 billion, because basically everyone is scrambling to get Nvidia chips to power your

late

st AI copilot and whatever it is, and if you look at the graph, I'll show it. the screen here for your editor please last quarter earnings you can see the green part at the top but how much of the revenue, on the left side you see the revenue and on the right side the red bits are expenses . The green bits are net income, real profits, look how much ending ends up in net profits, that's amazing now, such massive numbers of course also prompt calls that it's a bubble and is it Cisco?
too late buy nvidia after the split
Is this Cisco from 1999? I worked in a company in 1999. I remember. when the CEO and the founder walked into the room and said guys, we're literally out of money, the private equity company that was backing the business had said nothing more and if we go back to 1999, where everyone was saying that everything was going to rise forever. Basically, Cisco was selling something like Internet infrastructure and then they collapsed 90%. Now, why did they collapse so badly? I was working on now Nvidia is mainly selling their chips to companies like meta and Amazon and Microsoft and Tesla that can't really afford them, there are some smaller outlets that Nvidia partially funds etc. which might be a bit iffy, But the vast majority of its customers are very large, although there are some signs that Nvidia's momentum could be losing steam. 336 hedge funds reduced their holdings in Nvidia last quarter and insiders are selling.
too late buy nvidia after the split
Check out this Bloomberg headline here. Panic, panic, but wait if you really take a proper look at the data. Internal sales are not very elevated from 2019 levels, so yes, they are selling, but that's normal, that's how people get paid. People tend to show up to work because they want to get paid and then they will sell. some of their actions because they want to take a risk, they want to buy a house and a Ferrari yacht, you know, a second private jet, you know there are some real needs that employees have at Nvidia, but is there really something to the slowdown story impulse?
Well, there is one thing we can look at and that is live dark pool trading. Dark pools are exchanges where large institutional investors trade, so you and I don't see the trades now, we actually have access to that, if you get into options, be careful, there is one you can get. a three-month trial, you can play with it, it's completely risk-free, type Nvidia in the Smart Tab smart TS search box here on the right and then sort by the largest packages. You can also filter B. I'm just clicking down. See do that again, yeah, so I can just see the bigger features and look at those 158 million 32 million 32 million 28 million 2 million I mean, these are institutions, right?
You can see it's not your neighbor, not even you know the kitty Chap and what do you see bearish bearish bearish bearish bearish and you scroll down and everything is bearish they are all bearish traits every one of them of these millions and millions of dollars well there are one, but you know it's very, very bearish and I can keep scrolling and it will continue to show bearish traits, so what does that mean? It means that people are taking profits very, very simply, so there is definitely profit taking on Wall Street and that will slow down the rally a little bit, but I personally believe.
Winston is wrong. Did I say he was wrong? Did I say he was right? I'm not sure. I think the party will continue and I'll show you why there is a very good reason that makes me bullish on Nvidia with a little bit of a caveat on momentum, look at the chart that I'm showing up on this screen here, um earnings per share forecast, um? why do we care so much? The number everyone is looking at is PE, so 2025 PE now let me get a pen. In fact, look at Microsoft, please, 2025 PE right now is 44 times PE is what price divided by earnings is, which is a fancy word for earnings, so what happens over time, let's say you will buy the stock today, well, the price would be set at just whatever. today it is 120 dollars or something like that, profits can continue to rise and if Nvidia grows 30% in 2026, its PE will drop to 34 and if in 2027 it will only raise 16% because the party is over, I think it could continue growing. at higher levels, by the way, I firmly believe that then it will be 29 and then in 2028 I say it grows to 26% again, but it is not particularly wonderful compared to the 125% that we expect by 2025, now its PE is 23, why What I care what happens with the numbers, look at the current PE ratio of the entire IT sector right now is 33, so good companies right now tend to trade 20-30 plus multiples and good companies, Really good companies get cheaper and cheaper and cheaper. every year you keep them because they keep generating earnings growth, more growth than last, more earnings than last year and therefore their multiples keep going down and down, so if you have a long-term horizon, I think not There is nothing wrong with buying.
Nvidia of course is not financial advice, just an old banker and his golden retriever sharing their wisdom and knowledge, but before you go out and buy the now cheaper post split Nvidia because it looks like it's cheaper, it's a tenth of the price that is. It's not really that, of course, it's just that you're getting a tenth of the company and you have to ask yourself: are you buying it because you really understand the business and you really understand what's happening with AI chips or are you buying it? just for fun? because it's going up and everyone is talking about it, it's impossible to time the bursting of a bubble correctly and there's a saying on Wall Street, no one rings the bell at the top, so basically what I would say is enjoy the party, keep dancing, uh, just don't do it. get caught with your pants down when the momentum stops properly and one thing you can do is watch the actual momentum on the dark trades in the options pool on watch.io that's a great tool and secondly learn how to cover up seriously, learn to cover up.
We have a video on that, if you want to learn how to protect your wallet, how to protect your Nvidia position for free, watch the video below and you will be much wiser and much safer. I love you for watching, see you in the next one, Felix here and Tula, my trusted financial advisor, and we're going to teach you how to never lose money again and although that's not some kind of scam, rip-off or over-promising , it is actually possible.

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