Investment Review day 28 of 50: NVIDIA $NVDA
Nvidia $NVDA is at the forefront of artificial intelligence, delivering cutting-edge hardware and software that’s powering innovation across all segments of industry and our personal lives.
I was a relative latecomer to this company and only started tracking it in 2021. AI was clearly the future for the company, but at that time the majority of revenues were from consumer graphics cards (essentially, gaming and crypto).
The true pivot to AI started to be seen in the numbers in 2022, and that was my prompt to open a position, which I added to far more quickly than is usual for me, driven by a strong personal conviction that the company’s industry-leading combination of hardware (Grace Hopper) and software (CUDA) was going to drive the next wave of AI innovation.
I’m still long $NVDA today, but started to get cold feet about the valuation last April. The stock was trading well outside of historical norms for price-FCF, and this felt unsustainable. Younger less experienced Luke would have ignored the valuation and stuck to the story, but if 2022 taught me anything, it’s that numbers matter, so I cut my stake by 60%, and then trimmed it again last month.
I’ve yielded a handsome 6x return on my Nvidia investment; younger Luke would have done better, but more prudent Luke is satisfied with his decision-making process.
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I’m putting my holdings under the microscope. Over the next 50 days I’ll break down my whole investment portfolio. Wins, losses, and the ‘why’ behind it all. And on day 50 I’m going to share my full portfolio so you can see how my strategies played out in the real world over the last twenty years and what we can all learn together. Follow along for the journey! #StockAnalysis #50daychallenge
