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As popular as it is, Nvidia’s (NASDAQ: NVDA) inventory is not without its flaws.
In recent years, the semiconductor giant has recorded impressive degrees of growth, but already reflected in its valuation, stocks may experience sharp declines if they start not meeting expectations again.
This won’t affect stocks anytime soon, as demand for your CPUs and GPUs remains strong. A strong crypto market also reduces considerations about the cryptocurrency slump that negatively impacted inventory in 2018 and 2019.
However, there is something else that can do or break the actions, as the rest of this year unfolds. Unfortunately, this is beyond Nvidia. Je is talking about the next direction of the market.
Following Federal Reserve Chairman Jerome Powell’s recent dovish speech, it’s possible that generation stocks will simply rise or, despite the post-talk rally, markets will remain volatile in the coming months. The threat of an immediate decline that slowly is still on the table.
So do we buy or take a more cautious approach? Basically, this is based on their non-public attitude in the long term of the global market.
Driven through the call for knowledge centers and games, sales in the quarter ended August 1 increased 68% year-over-year and 15% sequentially (quarter-over-quarter). Non-GAAP earnings for NVDA shares increased 89% year-over-year and 14% from the prior quarter.
Not only that, crypto concerns that weighed in the past are now on the back burner. With the return of Bitcoin (CCC: BTC-USD), there are now fewer concerns related to a cryptocurrency crash and an upcoming chip glut, which was observed a few years ago.
As you know, crypto miners are big buyers of Nvidia chips. The company has attempted to restrict its exposure to this highly cyclical market by releasing a chip committed to mining, and has reduced the mining capacity of its GPUs to discourage its use for this purpose. With those preventative measures, as well as the recovery of cryptocurrency prices, this summer’s considerations about the challenge were likely exaggerated.
Company-specifics may remain strong for NVDA shares; however, it is certain that market situations will continue to be on your side. On the one hand, Powell’s recent comments imply that tech stocks like this continue to perform well.
The market reacted definitively to the speech, as it convinced investors that the Fed’s policies would not change for at least the next few months.
In turn, investors have begun to pull back in tech stocks as they are less concerned about interest rate hikes. With a rollback rotation in tech gaming, Nvidia can also keep pushing higher. This would possibly not result in NVDA being consistent with percentages. , is already up about 70% since the start of the year, making it up to $300 consistent with the constant percentage to close the year. But it can help your consistent percentages increase from here.
On the other hand, Powell’s speech does not ensure that smart times will continue to roll. Much of their caution about reducing/increasing rates is similar to their purpose of achieving full employment. Upcoming job figures may simply imply that the Delta variant is not slowing down the post-Covid recovery. With this, the Fed may begin to decline before the end of the year. Treasury yields can also increase. Both occasions would reduce technological actions in the direction.
Your attitude deserves to know if you deserve to buy, sell or retain.
Do you think Powell’s statements imply that “easy money” policies will continue until 2022?Buy NVDA shares, as they could have a shorter-term advantage. If you think otherwise, you may need it until it backs down.
At the date of publication, Thomas Niel had a long position in Bitcoin. He had (directly or indirectly) no position on other values discussed in this article. The perspectives expressed in this article are those of the author, the subject of InvestorPlace’s publication guidelines. . com.
Thomas Niel, a contributor to InvestorPlace. com, has been writing individual movement analysis for publications since 2016.
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