July 30, 2024
How much lower can NVIDIA go?
Well, like any other stock, the most NVIDIA "can" go down is 100%. That is possible, yet highly unlikely. We think that this summer NVIDIA will go down to $100 per share for a market capitalization of about $2.2T. In about a year, NVIDIA should be trading anywhere from $50 to $75 a share.
How much higher can NVIDIA stock go?
Well, theoretically, there is no limit to appreciation. At its peak in June 2024, NVIDIA had return almost 300,000% from its initial public offering in 1999. Of course, most of that was led by the AI boom / bubble. In theory, NVIDIA could continue rising forever. That is possible, yet extremely unlikely. So what is the sweet spot for NVIDIA between a possibility of evaporating to 0% of its current value to appreciating to infinity.
What is the true value of NVIDIA?
No one knows. Economic value is an opinion. Market value is the opinion formed between buyers and sellers. Money itself is a derivative opinion. Money is an expression or reflection of an underlying opinion about the value of a holding or payment. We think that NVIDIA should go down an additional 5% this summer. A $100 per share valuation for a market capitalization of about $2.2T should be okay for NVIDIA this summer. Eventually, NVIDIA will keep losing value down to a valuation of about $1T. Yes, we think that NVIDIA is hugely overvalued. It will shed $1T as easily as it gained. Easy comes; easy goes.
How's NVIDIA doing today?
As of today, NVIDIA is down about 26% from its peak, trading at about $104 per share for a market capitalization of about $2.55T. On June 20, 2024, NVIDIA shares rose intraday to $140 per share, for an incredible market capitalization of about $3.4T. That absurd valuation made NVIDIA the most valuable company in the world, and probably in the history of humanity. It made absolutely no sense. We predicted a 30% decline. It's been a 26% already. NVIDIA has shed $850 billion within the past 40 days. That is over about $21 billion dollars per day! NVIDIA's race to a floor has been certainly faster than what we anticipated.
What is next for NVIDIA?
No one knows. The future has not been created yet. Investors and speculators keep pushing and selling NVIDIA. We think that NVIDIA is still significantly overvalued. Within a year it could lose about 50% of its value. Yet since the stock has been pushed and continues to be pushed so heavily to institutional investors, it is hard to predict how many "false positives" NVIDIA may register from now until its eventual semi-permanent decline anywhere between $75 and $50 per share.
Stay tuned.
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