1. Nvidia (NVDA)
Cathie Wood has just bought $36M worth of Nvidia. Nvidia has beat all 4 of their last earnings calls and continue to be the darling of the market at a $5.4T market cap. Their PE ratio continues to hover around a respectable 41 which seems high at first glance, but quickly seems to become justified when one realizes that analyst estimates place their EPS growth forecasts at numbers like 87% and 41% over the next 2 years. This puts their PEG ratio at 0.5 which is really outstanding for a company the size of Nvidia.
The average analyst rating for NVDA is a Strong Buy with a +25% one year forecast, and we have it as medium risk high reward. Our current rating for Nvidia is a Buy with a +23% one year forecast.
2. Cerebras Systems (CBRS)
Cathie Wood has recently bought over $36M worth of CBRS shares after seeing the stock decline over 20% year to date. Cerebras is currently valued at an insane PE of 550 but they do make up for some of that valuation with EPS growth estimates of around +120%. This makes their PEG 4.6 which is extremely high and a sign that this stock is overvalued at that 550 multiple despite its impressive earnings projections.
Their revenue has been growing impressively but given the uncertainty of the earnings and revenue growth looking forward, the risk profile of this stock is tough to justify right now when paired with such a high valuation. We have Cerebras as a high risk, high reward stock and rate it a Hold with a +5% one year forecast. We haven’t been able to find any credible analyst ratings for this stock but the overall sentiment seems to be pessimistic.
Topics: NVDA stock, CBRS stock forecast and rating
