TrumpGrift Capital
Equity Investing Commentary
Nvidia's recent weakness came from forced index-rebalance selling, and with that out of the way the selling pressure should abate. About 50M shares, roughly $11B, were sold indiscriminately in the last minutes of the session as people sold or shorted into the rebalance. GTC over the weekend, where Jensen Huang might reveal a new product, and Dell's quarter could be catalysts over the next two weeks. x.com x.com x.com x.comÂ
Nvidia looks due for a catch-up trade, with the stock near three-year lows relative to AMD. A mid-to-high-teens P/E also seems hard to ignore. x.comÂ
Nvidia looks interesting again because rising earnings estimates have not been reflected in its valuation. FY28 EPS estimates rose about 25% in 60 days while shares stayed roughly flat; it trades below 14 times FY28 earnings with a mid-single-digit free-cash-flow yield. Exponential change is hard to grasp, and it is hard to see Nvidia not winning if the US does, though there is little capital to absorb market wobbles. x.com x.comÂ
Financing risk makes AI-linked growth stocks unattractive to add here. Much of the money reaching suppliers such as Nvidia and Micron is financed, so harder funding would limit spending on chips, compute and memory. The buildout is not over, but stock prices could remain suppressed until it slows. A significant drawdown would make adding appealing; for many high-beta names with weak fundamentals and balance sheets, the highs look to be in. x.comÂ
Nvidia could see AI infrastructure demand above $1 trillion, or about $900B next year and perhaps 2028, as long as capex isn't slashed. The worry that the next two years are peak capex is what holds the stock back from $240 or even $300. It and Micron should move once the market flushes out more holders and the war ends. x.com x.comÂ
Significant institutional-level dark-pool activity supports Nvidia's potential Q4 move back to its high, then $264 and $280. About $11 billion came in around $222 and $227.50, but the ride may be bumpy. After another pullback, holding the $223-$226 area for several days would confirm the setup; repeated sideways action after break attempts means staying away for now. x.com x.comÂ
Nvidia faces risks on both sides of the AI cycle. Vendor financing is a concern at the center of the buildout: strong AI sentiment brings competition, while weaker sentiment brings a slowdown. That makes it the largest holding of greatest concern. x.comÂ
Nvidia's next move is being underestimated while attention is on Meta as the Magnificent Seven all-time-high candidate. Nvidia has increased its record buyback authorization to $235 billion into fiscal 2028, just as the stock breaks out from a year-long range. x.comÂ
NVIDIA's 62% net profit margin makes shorting the stock hard to justify. x.comÂ
Nvidia isn't worth owning into the future: the law of large numbers is hard to beat, and the stock has been selling off on earnings beats. Margins are declining, and @AtlasShrug1 notes Nvidia is stretching by extending credit where traditional lenders won't, lowering the quality of each incremental revenue dollar. Efforts to cut HBM content per token and improve memory architectures may offer only temporary relief. x.com x.comÂ
Micron and SanDisk stand to surge as Nvidia's CFO warns of extreme memory pricing that has exceeded Nvidia's expectations and is headed even higher into next year. Nvidia expects supply to remain a bottleneck through at least the end of FY28, and guided its gross margin to bottom at 71-72% in Q4, with FY28 around 72-73% versus a 74% estimate. x.comÂ