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Business Insider
5 days ago
- Business
- Business Insider
‘Time to Hit Pause on This Fairy Tale,' Says Top Investor About Nvidia Stock
Nvidia (NASDAQ:NVDA) stock has followed a true Wall Street fairy tale this year, with plenty of twists and turns. While the company's growth story has largely held strong, its golden path to riches has meandered through some shadowy terrain along the way. Confident Investing Starts Here: Global trade shocks, a U.S.-China spat, and worries about the future of AI spending have all taken turns spooking investors. And yet, in spite of all the potential pitfalls, last week Nvidia announced another stellar earnings report, outpacing both top- and bottom-line expectations. Was this just another indication that Nvidia remains an unstoppable hero on a white horse, destined for more revenues, profits, and happy shareholders in the years ahead? Not necessarily, according to one top investor, known by the pseudonym JR Research. The 5-star investor thinks the time has come to take the foot off the gas pedal and downshift into neutral. 'We should not expect Nvidia to replicate its explosive surge over the past two years,' posits JR, who is among the top 2% of TipRanks' stock pros. JR explains that the company will need to generate some 'big moves' in order to drive explosive growth for its share price, as the law of large numbers increasingly comes into play. While these could come in the form of bigger AI chip commitments, AI clusters, and AI factories, the investor does not believe these developments are a given. JR reminds investors that AI capex among the hyperscalers is likely peaking in 2024-2025, meaning that overall spending will be sinking in years to come. The investor also notes that Nvidia's revenues are increasingly concentrated in its data center segment, which grew by leaps and bounds to $132 billion in the trailing twelve months (essentially doubling from the same period last year). This made up almost 90% of Nvidia's revenues – leaving the company susceptible to slowing growth if its other segments can't pull their weight. 'I don't think the market will be keen to push through the valuation optimism through its data center business much further,' adds JR. Moreover, the challenges to the company's China business are facing geopolitical threats, while Huawei is poised to bite off a big chunk of the company's revenues. The bottom line? Nvidia's growth engine isn't stalling just yet, but the road ahead looks far less enchanted than before. 'I believe the market is positioning for a growth deceleration phase that could see the stock trade sideways/consolidate as it undergoes a digestion,' concludes JR Research, who gives NVDA shares a Hold (i.e. Neutral) rating. (To watch JR Research's track record, click here) On the other hand, Wall Street's love affair with NVDA is far from over. With 36 Buy, 4 Hold, and 1 Sell recommendations, NVDA continues to enjoy a Strong Buy consensus rating. Its 12-month average price target of $173.19 implies a potential upside of ~23%. (See NVDA stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Business Insider
05-05-2025
- Automotive
- Business Insider
‘The Comeback Has Legs,' Says Investor About Tesla Stock
Tesla (NASDAQ:TSLA) shares are charging ahead, soaring 26% in just two weeks after Elon Musk hit the brakes on his political distractions to zero in on the company's core mission. During the latest earnings call, Musk signaled a renewed commitment to Tesla – and investors wasted no time rewarding the shift. Protect Your Portfolio Against Market Uncertainty Truth be told, there was little else for Tesla bulls to celebrate during the earnings call, as the company reported slowing revenue and weakening margins in Q1 2025. Looking ahead, Tesla plans to revisit its 2025 guidance in a future Q2 update, citing the uncertain geopolitical landscape among other factors. So, is this rally a sign of lasting momentum or just another Musk-fueled sugar high? One investor, known by the pseudonym JR Research, believes Tesla's turnaround has real traction. 'Tesla is focused on the second half growth imperative, moving past the headwinds that afflicted its Q1 performance,' posits the 5-star investor. JR cites a number of factors that support this optimistic take, starting with the upcoming production launch of a more affordable EV in June. The investor also notes that the volume production for the company's robotaxi initiatives remains on schedule for the second half of 2026. In addition, while Tesla is not immune from the effects of a global trade spat, JR points out that the company is in better shape than most due to its North American-based manufacturing. In fact, the investor emphasizes that 85% of its supply chain is USMCA-compliant. Still, JR acknowledges that there are reasons to be cautious. Tesla is facing strong and growing competition in the Chinese EV market, while Musk's political affiliations may drive further losses among European and Canadian consumers. Indeed, JR suggests that 2025 could be a 'year to forget' for Tesla. However, that could end up being a plus for those willing to look beyond the rough start to the year. 'I believe the bullish sentiments anchoring the stock's recovery have robust momentum, although it might take some time for growth investors to catch up with the optimism… If you have conviction in Tesla's execution of a recovery in the second half, with Q1 being the nadir, I believe the opportunity to add exposure seems apt,' concludes JR Research, who rates TSLA a Buy. (To watch JR Research's track record, click here) Wall Street, on the other hand, isn't quite ready to jump in with both feet. With 16 Buys, 9 Holds, and 11 Sells, TSLA carries a consensus Hold (i.e., Neutral) rating. Its 12-month average price target of $283.69 suggests the stock is fully valued. (See TSLA stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Business Insider
05-05-2025
- Business
- Business Insider
‘Catch It While It's Cheap,' Says Investor About AMD Stock
Advanced Micro Devices (NASDAQ:AMD) has certainly had its share of heartache recently. The chipmaker has been bruised by fierce competition with Nvidia, trade disruptions, tariff battles, and tightening export rules targeting China. A 32% drop in the stock over the past 12 months tells the story. Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. But with AMD set to report its Q1 FY 2025 results on Tuesday, May 6, at least one voice sees a window of opportunity. JR Research, a well-followed investor, believes that the downside is already factored in and that now might be the perfect time to pounce. 'AMD's valuation is attractive,' asserts the 5-star investor. 'The market has priced significant risks against its cyclicality.' Fears of a capital expenditure (capex) slowdown have been mounting amid broader economic uncertainty and rising trade tensions. Addressing fears of a capex slowdown, the investor notes that the recent earnings reports from the big tech companies have demonstrated that these worries appear to be overblown. In fact, JR points out that Meta even raised its capex spending outlook. Now, JR is hoping that AMD's management will give further support for this positive movement on the upcoming earnings call through bullish guidance – particularly for the company's data center business. JR adds that this segment now comprises some 50% of AMD's revenues and had been showing healthy rates of growth throughout the past few quarters. The investor thinks that with a forward EBITDA multiple of 21.2x, AMD may never be this cheap again. 'The market appears ready to reallocate exposure to AMD's battered valuation, suggesting AMD might continue to gain momentum,' concludes JR Research, who rates AMD shares a Buy. (To watch JR Research's track record, click here) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
