Nvidia's valuation is high, but ‘I’ve lost opportunity every time I sold it,’ trader says

Former NYSE trader Stephen Guilfoyle says he's lost opportunity every time he's traded Nvidia when discussing the stock's sky high valuation.

May 23, 2024 - 02:30

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Nvidia's valuation is high, but ‘I’ve lost opportunity every time I sold it,’ trader says

These days is there any stock except Nvidia (NVDA) ?

It's no secret Wall Street can't stop talking about the semiconductor and AI play with Jensen Huang at the helm, but is all the hype justified?

In the words of former NYSE trader and TheStreet Pro contributor, Stephen 'Sarge' Guilfoyle, it's a big 'yes.'

"For Nvidia is the flame, for we, the many of us, are but moths and all sorts of ugly creatures."

Alright, great, but let's get a little less Dickensian for a hot second. Guilfoyle stopped by our set at the New York Stock Exchange to break down why he thinks Nvidia's high valuation is more than justified despite the fact the stock has tripled since it last reported earnings and issued strong quarterly guidance.

Is this a tale of 'Great Expectations' or is Guilfoyle right on the money?

We'll find out when Nvidia reports second quarter earnings after Wednesday's closing bell.

For more on how Guilfoyle trades Nvidia, read his latest take on TheStreet Pro.

FULL VIDEO TRANSCRIPT BELOW:

Stephen Guilfoyle: Everyone I think, has to be obsessed with Nvidia. I'm invested in the name myself. Not as much as I was.

I took a little bit off the table just to be out front with that. But every time you take a little bit off of NVIDIA because it hits your target price, it comes back and slaps you in the face again.

So even though it's been a highly profitable trade, I've lost opportunity every time I've sold something. So traders, investors have to be watching, probably want to be participating to some degree in Nvidia.

It is the bellwether for the generative AI revolution. It's a representative of what the Amazon's (AMZN) , the Google's (GOOG) , the Microsoft's (MSFT) , what all of them are now spending in terms of capital expenditures on keeping up with each other and competing.

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It is the goal if you're a stock like Advanced Micro Devices (AMD) or Marvell (MRVL) technology, it is who you're chasing in terms of trying to gain market share.

Although their moat, their technology has been really defensible to this point, the we're seeing maybe a slight deceleration in the pace of growth of sales, but I don't think it's anything that should scare the investor.

It's really it will come down to valuation. And is valuation a little bit high for Nvidia? Sure, have they earned a high valuation. Yeah, they certainly have. And maybe. Maybe it deserves to be even higher. I guess we'll soon find out. And they also have maybe perhaps the coolest CEO in the business. If I am a Lisa Su fan, so I don't know how much I can stick to that. But Jensen Huang is simply the Fonz.