Nancy Tengler views Nvidia as a strong investment due to its robust projected earnings growth and reasonable valuation, recommending adding to positions on price dips rather than aggressive buying at current levels. She emphasizes a balanced, patient investment strategy focused on AI and technology leaders, including Nvidia, AMD, Microsoft, and others, while trimming winners to lock in gains and preparing for future technological shifts.
Nancy Tengler, CEO and Chief Investment Officer at Laffer Tengler Investments, shared her insights on Nvidia’s current valuation and growth prospects. She acknowledged that while Nvidia’s stock price might seem high to some, the valuation is not overly stretched when considering the company’s projected earnings growth. Tengler highlighted that Nvidia’s fiscal year earnings growth is expected to be robust, with significant increases forecasted through 2026. She noted that the stock is trading at a forward price-to-earnings ratio of 40, which translates to paying less than one times on a price-to-earnings-to-growth basis, making it a reasonable investment unless one believes the company’s growth is over.
Tengler explained her investment strategy regarding Nvidia, mentioning that her firm added to their position during the April tariff-related market dip when the stock was around $108 per share. While she does not recommend buying aggressively at current levels, she advises investors to add to their holdings on price dips. She also pointed out that AMD has seen gains, partly due to the reinstatement of its M1 chip, which benefits the broader semiconductor and AI technology space. The AI sector remains a key focus for Tengler, who has been emphasizing productivity and the importance of investing in companies that embrace or provide new technologies.
In addition to Nvidia and AMD, Tengler discussed her tactical moves within the AI and technology sectors. She mentioned trimming positions in Broadcom and Oracle, both of which have performed well and are significant holdings in her investment portfolio. Despite trimming, she remains bullish on these companies for the long term. Tengler also shared that her firm recently bought Microsoft shares ahead of earnings, a rare move for them, which has since yielded substantial gains. Her approach encourages patience and avoiding the fear of missing out (FOMO) while maintaining confidence in the transformative potential of these tech giants.
Tengler drew parallels between the current AI-driven market environment and past technological shifts, such as the 1990s tech boom. She emphasized the importance of investing in “old economy” companies that are pivoting to new technologies, as well as those providing essential tools and infrastructure for these advancements. This strategy reflects her belief in a regime change led by companies like Nvidia, which are not only capitalizing on AI but also preparing to pivot to future technologies like quantum computing. This forward-looking perspective underpins her confidence in holding and selectively adding to positions in these innovative firms.
Overall, Nancy Tengler’s commentary provides reassurance to investors about Nvidia’s valuation and growth potential amidst market volatility. She advocates for a balanced approach of holding core positions, trimming winners to lock in gains, and adding on dips to capitalize on long-term growth trends in AI and technology. Her insights underscore the significance of patience, strategic allocation, and belief in the transformative impact of companies driving the AI revolution and beyond.