NVIDIA Stock (NVDA) Investors PANIC! 😱 Sell or Buy?

Nvidia stock price went down after the Q2 Financial results now you might be worried especially if you've got it in your portfolio I will break down what really happened and what this could mean for your Investments subscribe to this Channel and watch till the end because I will show you the fair value of the company as you can see the revenue went up quarter over quarter by 15% and an impressive 22% year over-ear you'd think this would send the stock price to the Moon right but instead we're seeing the stock price Deep In extended hours now you might be wondering why is it happening first of all the expectations were Skyhigh and we're possibly in the middle of AI bubble but when the company like Nvidia reports strong results and when those numbers aren't great beyond expectations the investors seem might want to lock in the profits if you look at this trading view screen you can see that yetto date the stock price nearly doubled it's actually more than doubled up 155% so if you are worried that the price may go even lower or the revenue will slow down you might want to take the profit also if you have a look at this valuation ratios at the moment Nvidia enjoys price to earnings ratio 75 price to sales 40 and price to cash flow 78 so this is probably three times more than the average company in the S&P 500 and when the company like Nvidia doesn't grow every quarter 100% or 200% quarter over quarter those valuation ratios will have to come down if you have a look at this screenshot from the latest earnings announcement you can see that in the previous quarter gross mark was 78% in the current quarter it is 75 so this is the first time we see a reduction in the margin quarter over quarter by three points of course they have an explanation about it that this these are the costs associated with the new Blackwell architecture but investors are starting getting worried is this the start of the margin pressure and I have to explain you quickly that it says FY 25 it's not a calendar year 2025 that's their financial year 25 which is different to the calendar year now let's have a look at this spreadsheet you can see revenues year-over-year growth has been consistent from Q3 2024 up by nearly 200% the next quarter 26% year over year next quarter 265 and this is the first quarter we see quite a big slowdown back to 122% once again this is another reason for investors to get worried is this the start of the Slowdown now let's have a look at the revenue by segment obviously data center that's the most important part it's up from last year's Q2 FY 24 from 10 billion to 26 billion in the current quarter which is up by nearly 150% and it is up by 16% from the previous quarter but the gaming which is also growing it is not growing as fast it's up by nearly 400 million which is 16% from the same quarter in the previous year but it is only 9% from the previous quarter and obviously when you have Nvidia valued at 40 price to sales you want a very high growth and investors were not impressed now let's have a look at the outlook for the next quarter you can see that the revenue is expected to be about 32 billion which is nice but the margins are going down to meet 70% range and once again investors when they pay such a high multiple for the stock they are not impressed when the margins are going down now let's have a look at one of my favorite search websites simply Wall Street and it says that earnings are aost to grow by 24% per year on average over the next three years if you scroll down you will see two different analysts one of them says it is overvalued by 90% and another says it is undervalued by 8% if you are interested you can open these two articles and research for yourself by the way if you want to get some special bonus es from all the research websites that I mention in this video follow the links in the description below then we can move to valuation and according to this DCF calculator it says that the company is overvalued by 39% another website that I use quite often is Alpha spread and it says that the company is overvalued by 33% that's a base case and if you are very optimistic the best case says that the company is undeveloped by 35% now let's move to Yahoo finance and as you can see here full-time professional analysts were quite bullish in June and July but in August only 14 of them said it is a buy and 15 of them said it is a hold so there is quite a big change in sentiment now let's have a look at Zach's website and it has Zach's rank number three which is a hold it's not a number two which is a buy or this green color number one which is a strong buy and that means that full-time professional analysts did not raise the forward-looking guidance which could be another reason for the stock price to go down I'd like to know your opinion would you buy Nvidia at this price or would you invest in something else now let's quickly again have a look at the financials of the company this blue line is the revenue and yellow is the net income as you can see each quarter the revenue and net income is going up so the company is not going to go bankrupt there is still demand for their products but this dip could be an opportunity for you to reassess your portfolio are you overweight in tech stocks if so you need to diversify and invest in better opportunities there are three key takeaways the first one is expectations were Sky High and Nvidia needed not just good results but the company had to exceed them by a wide margin to keep the momentum going the second one is gross margin pressure you have to keep an eye is this the signal of future challenges to maintain profitability last but not least the company has good fundamentals it's not going to go bankrupt and just maybe wait for another pullback or bigger correction and maybe add a small portion to your portfolio obviously I'm not your financial advisor you have to do your own research but maybe better opportunities are coming I'd appreciate your feedback down in the comments below let me know what you think about this company would you buy it right now or what other opportunities are there and what else would you invest thank you my