What to expect from Nvidia's shareholder meeting

After hitting record highs, Nvidia (NVDA) is on track for its third consecutive session of losses. Harvest Portfolio Management co-CIO and Nvidia shareholder Paul Meeks joins Catalysts to discuss the stock's movement and Nvidia's upcoming shareholder meeting.

Meeks expects Wednesday's meeting to "make investors feel comfortable that there is a long runway" as the company touts its AI initiatives. He believes CEO Jensen Huang's remarks will cause the stock to rebound from its period of decline.

"I think you must believe that the company will continue to upside numbers. I mean, they have scorched the quarterly numbers for about a year and a half ever since the advent in November of '22 of ChatGPT, and I think you can probably expect more of the same," Meeks adds. He expects Nvidia to continue to push the narrative that the AI chip boom will last longer than expected, allowing them to continue to beat earnings estimates.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Melanie Riehl.

Video transcript

Our big story is NVIDIA on track for a third straight session of declines the slump nearing $300 billion in losses for the tech giants market cap.

And this comes ahead of the company's shareholder meeting this week, one of those shareholders joining us.

Now we've got Paul Meeks, he's co cio of harvest portfolio management.

Paul, it's great to speak with you and thanks so much for taking the time with us this morning.

I'm curious from your perspective how you are digesting the movement that we've seen with NVIDIA stock over the last couple of days?

And does it change anything about your thinking when it comes to your holdings of NVIDIA?

So last thing first doesn't change anything.

I think what's happened, you know, the stock has just done so well.

Now there's some talk about uh peak data center A I sales and of course, that has to happen at some point.

But I think the near term to even the intermediate term over the next couple of years, Madison is um you know, I don't think there's really much uh controversy about that.

I think what happens on Wednesday when they have their annual shareholders meeting at some point in the presentation and it starts at 9 a.m. pacific time.

Uh Jensen Wang will strut to the stage that was not released in the press release for the event.

But I imagine that's the case.

It's essentially um industry standard and we'll probably again articulate the wonderfulness of A I.

And the key here is to make investors feel comfortable that there is a long runway yet.

So I think what happens here, we have some profit taking, some worry about uh peak sales.

I think we'll have a reversal and the stock will rebound based on the remarks from Ceo Jensen Wang on Wednesday morning pacific time.

Well, it's interesting Paul because I wonder if part of the problem with a company like NVIDIA is that the growth has so outpaced expectations and it's such a new name for folks to get used to as part of the problem that the math of analysts behind this name is sort of lagging and therefore we don't have a great insight and transparency into videos growth story.

That's right.

That's right.

Because if you believe, and I think you must believe that the company will continue to upside numbers.

I mean, they have scorched the uh quarterly numbers for about as you know, a year and a half ever since the advent in November 22 of chat GP T and I think you can probably expect more of the same, the interesting thing is, the company does not uh preannounce numbers because what happens when you start preannouncing numbers and then you stop.

You can see what happened a couple of quarters ago with Super micro S MC I, which is another company in this space.

So I expect them to continue to beat numbers.

I expect them to continue to push a narrative which I do believe is true that the A I chip boom will last longer than people will expect because it'll be much more large language model building.

And then inference uh work at all of the hyper scalar.

And the other guys that are spending tens of billions of dollars to continue to build out A I infrastructure.

So that helps give some insight into what you look at to suss out the growth story for NVIDIA.

But when you see market moves like the ones we're seeing right now, do you take that as a buy signal?

Now, what I'm looking at is I'm pretty comfortable with the fundamentals and I'm pretty comfortable that there will be a fundamental uh push upwards on the annual meeting later this week, Wednesday morning.

Uh What I'm looking now is I do wanna buy some more.

I'm inclined to buy some more, but I'm looking for a technical support.

I had thought it was gonna be about the 20 day moving average, which is actually where the stock is right now.

And so now I'll probably wait to see if it settles lower at the 50 day moving, average, so comfortable with the fundamentals, not comfortable with the technicals and just looking for some technical support where the stock finds support for a couple of days, the volume dries up a little bit and then I'm, uh, inclined to go back in because I think that's the right move.

I don't believe that this is a stock that should be shorted here or even sold here.

Yeah.

Well, it's interesting too.

We've been hearing the question about concentration valuation.

I feel like that's been the reigning cry from a lot of notes over the past year or so.

Paul to what extent does the valuation piece play into your overall investment outlook?

Not just your NVIDIA holdings, but your overall portfolio when it comes to tech in general.

Yeah, the, the way I look at it and of course you have to talk about NVIDIA because it dominates my sector.

Um is the stock expensive maybe a little bit expensive after its most recent run before this uh drop off.

Uh but it had not been.

And if you take a look at probably the closest compare uh here is Cisco systems building out the internet infrastructure in the very late nineties, very early two thousands and that stock got up to over 100 times earnings.

And so here we are at 3040 times earnings.

Is it cheap?

No, is it a little bit expensive?

Yes.

Is it egregiously expensive.

No.

So I actually think that um I'm not so worried about the valuation and I'm looking for that uh technical stability before I go back and add to the position.

So of course, my position is already quite large.

All right, we're gonna have to leave it there, but thank you so much, Paul for joining us, really appreciate it.

That was Paul Meeks Cio and also a shareholder in NVIDIA.