One Nvidia (NVDA) bear warned the time has come for investors to sell.
Nvidia failed to meet sky-high expectations when it reported its fiscal second quarter earnings on Wednesday. Nvidia reported profits and revenue that topped forecasts but not by as much as investors hoped, delivering its smallest earnings beat in the last six quarters.
Nvidia stock fell 6% on Wednesday evening in reaction to the results and continued to slide 4% lower on Thursday afternoon. Year to date, the stock remains up nearly 140%.
When asked when it might be time to sell, David Bahnsen, chief investment officer of Bahnsen Group, said, “About a month ago. Two months ago. Today. Tomorrow.”
“People are paying for perfection,” Bahnsen added (video above). “You’re buying Nvidia banking on there being another investor who’s a bigger sucker than you are.”
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The warning from Bahnsen comes as the stock has rallied 1,000% from its October 2022 lows. His call is based on one data point: Nvidia’s price-to-earnings ratio, which sits just above 56 after earnings but neared 80 in July.
He offered a reminder that a company and its stock are not the same thing.
“This is not me bashing on Nvidia,” Bahnsen said. “This is a success story. I’m commenting on the valuation — that when you start paying those prices, the risk-reward skew becomes very unattractive.”
Still, it’s a risk that the 89% of analysts with a Buy rating on the stock are willing to take. The stock has zero Sell ratings, which is understandable considering Nvidia posted $30 billion in revenue in the second quarter, a 122% increase over the same period last year.
Nvidia’s future depends in part on other Big Tech companies. Hyperscalers Microsoft (MSFT), Meta (META), Alphabet (GOOG, GOOGL), and Amazon (AMZN) are responsible for 40% of Nvidia’s revenue, according to Bloomberg estimates.
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Alphabet CEO Sundar Pichai indicated on the company’s earnings call this quarter that the company’s spending on artificial intelligence would not slow down. “The one way I think about it is when you go through a curve like this, the risk of underinvesting is dramatically greater than the risk of overinvesting for us,” Pichai said.
Nvidia president and CEO Jensen Huang waves to the audience at a keynote presentation at COMPUTEX. (Walid Berrazeg/SOPA Images/LightRocket via Getty Images) (SOPA Images via Getty Images)
Alphabet’s investment in AI, which represents a significant portion of Nvidia’s revenue, could be a bullish signal to come. But those business fundamentals aren’t the only focus.
“The estimates for next year and the year after that are starting to get way, way out of control,” D.A. Davidson managing director Gil Luria told Yahoo Finance.
The next big question for investors is whether the Street’s reaction to Nvidia results this quarter will be enough to dampen earnings expectations heading into Q3.
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For Bahnsen, it may already be too late.
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Baker McKenzie today announced that leading project finance lawyer Matthias Schemuth has joined the Firm’s Singapore office* as a Principal and Asia Pacific Co-Head of Projects in its Finance & Projects practice, alongside Partner Jon Ornolffson in Tokyo.
Matthias joins the Firm from DLA Piper, bringing more than 20 years of experience in the energy and infrastructure sectors across Asia Pacific. He advises sponsors, developers, commercial banks, multilateral lending agencies, and export credit agencies on the structuring and financing of large-scale projects. His practice also spans international banking, structured commodity and trade finance, with a strong focus on emerging markets. Matthias has been consistently recognised by Chambers Asia Pacific and Who’s Who Legal as a leading project finance practitioner.
James Huang, Managing Principal of Baker McKenzie Wong & Leow in Singapore, said: “We are excited to welcome Matthias to our team. His expertise and proven record in managing teams will be invaluable as we expand our regional and global finance offerings for clients.”
Emmanuel Hadjidakis, Asia Pacific Chair of Baker McKenzie’s Banking & Finance Practice, commented: “Asia Pacific is seeing strong momentum in infrastructure development, energy transition investments, and cross-border project financing, much of it centred in Singapore. Having Matthias on board will further enhance our ability to help clients seize opportunities in the region’s evolving energy and infrastructure markets.”
Steven Sieker, Baker McKenzie’s Asia Chief Executive, added: “Matthias’s appointment underscores Baker McKenzie’s continued commitment to investing in exceptional talent across key markets to support our clients in navigating today’s increasingly complex business and regulatory environment.”
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Matthias said: “I’m thrilled to join Baker McKenzie and contribute to its strong growth in Asia Pacific. The Firm’s global reach and local depth provide an unparalleled platform for delivering innovative projects and financing solutions to clients in this dynamic region.”
With more than 2,700 deal practitioners in more than 40 jurisdictions, Baker McKenzie is a transactional powerhouse. The Firm excels in complex, cross-border transactions; over 65% of our deals are multijurisdictional. The teams are a hybrid of ‘local’ and ‘global’, combining money-market sophistication with local excellence. The Firm’s Banking & Finance lawyers are ranked in more jurisdictions than any other firm by Chambers.
Matthias’s hire continues the expansion of Baker McKenzie’s global team. His joining follows the recent arrivals of Carole Turcotte in Toronto; Tom Oslovar in Palo Alto; Jenny Liu in New York and Palo Alto; Helen Johnson, Mark Thompson, Nick Benson, Kevin Heverin, James Wyatt and Michal Berkner in London; Jan Schubert in Frankfurt; Todd Beauchamp and Charles Weinstein in Washington DC; Dan Ouyang, Winfield Lau, and Ke (Ronnie) Li in Beijing, Shanghai, and Hong Kong; and Alexander Stathopoulos in Singapore.
*Baker McKenzie Wong & Leow is the member firm of Baker McKenzie in Singapore
The Federal Reserve gave investors an early Christmas present by lowering interest rates by 25 basis points (i.e., 0.25%) marking its third rate cut this year. In the past, a change like this in the “long end” of the interest rate yield curve has triggered a predictable, investable pattern. Typically, this pattern would be bearish for finance stocks, particularly banks—investors would buy bank stocks when rates rose and sell them as rates fell….
Dozens of protesters from the “Religious Zionist Reservists Forum” and the “Shared Service Forum” demonstrated Saturday evening outside the home of Finance Minister Bezalel Smotrich in Kedumim.
The protesters arrived with a direct and pointed message, centered on a symbolic “draft order,” calling on Smotrich to “enlist” on behalf of the State of Israel and oppose what they termed the “sham law” being advanced by MK Boaz Bismuth and the Knesset’s haredi parties.
Among the protesters in Kedumim were the parents of Sergeant First Class (res.) Amichai Oster, who fell in battle in Gaza. Amichai grew up in Karnei Shomron and studied at the Shavei Hevron yeshiva.
Protesters held signs reading: “Smotrich, enlist for us,” along with the symbolic “draft order,” calling on him to “enlist for the sake of the State’s security and to save the people’s army – stand against the bill proposed by Bismuth and the haredim!”
Parallel demonstrations were held outside the homes of MK Ohad Tal in Efrat and MK Michal Woldiger in Givat Shmuel.
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Representatives of the “Shared Service Forum” said: “We are members of the public that contributes the most, and we came here to say: Bezalel, without enlistment there will be no victory and no security. Do not abandon our values for the sake of the coalition. The exemption law is a strategic threat, and you bear the responsibility to stop it and lead a real, fair draft plan for a country in which we are all partners. It’s in your hands.”
