My New Investment: Nvidia Corporation
In my recent investment decisions, I have added Nvidia Corporation (NVDA) to my portfolio, marking a departure from my index replicator strategies. This move was made after a notable pull-back in the stock, which I purchased at around $112.
PEG Ratio Model
The logic behind this investment is grounded in a PEG ratio model, which evaluates a company’s Price to Earnings (P/E) ratio in relation to its Price to Earnings Growth (PEG) ratio. This approach helps in assessing whether a stock is overvalued or undervalued based on its growth potential. In this case, I’ve capped growth assumptions at 25%.
Why Nvidia?
Nvidia is a leading technology company specializing in graphics processing units (GPUs) and system on a chip units (SoCs). Their innovations have been instrumental in driving advancements in gaming, professional visualization, data center, and automotive markets. With the growing importance of artificial intelligence (AI) and machine learning (ML), Nvidia’s role in these technologies has become increasingly significant.
Large Language Models and Their Impact
I am strongly bullish on large language models and believe they will soon be used by the public through every Internet of Things (IoT) device and eventually robotics. Nvidia’s GPUs are key components in training these models, making them an essential player in this emerging field.
Impact on Me
Personally, I expect this investment to yield significant returns in the long term as Nvidia continues to dominate the market for GPUs and SoCs. Moreover, the increasing demand for AI and ML technologies will further boost the company’s growth.
- Increased potential for capital appreciation as the stock price rises
- Dividend income from the company, assuming they maintain a dividend policy
- Sense of accomplishment and satisfaction from making a well-informed investment decision
Impact on the World
The widespread adoption of large language models, facilitated by Nvidia’s technology, could lead to numerous advancements across various industries:
- Improved efficiency and productivity in businesses through AI-powered solutions
- Enhanced healthcare diagnostics and treatment plans using ML algorithms
- More personalized education and training through AI-driven educational tools
- Smarter transportation systems and autonomous vehicles powered by advanced AI and ML technologies
Conclusion
In conclusion, my investment in Nvidia Corporation reflects my belief in the company’s potential to lead the way in GPU and SoC technology, particularly in the growing AI and ML markets. With the increasing importance of these technologies and the potential for long-term growth, I am confident that this investment will yield substantial returns. Furthermore, the positive impact of Nvidia’s innovations on various industries and aspects of daily life makes this an exciting opportunity.
