NVDA at 13.7x forward earnings and 0.21 PEG is cheap, but the price reflects high expectations; a revenue miss next month, capex cuts or falling data-center sales could trigger a sharp contraction. The speaker stays a long-term holder, buys any price drop, and adds on oversold dips while trimming overbought strength.

In your opinion, what would be an attractive PE to buy Nvidia? PE is a funny thing, and I'll quickly pull up a chart from Nvidia here.

Nvidia's PE based on forward earnings is now 13.7. It is just as cheap now as it was 15 years ago. So, if you say, "Okay, Lance, I'm looking for a cheap valuation to buy Nvidia," you'll see it's trading at 13 times forward earnings PE.

It also trades at a price-to-earnings growth ratio, because earnings growth is the company's rapidly growing earnings. Their PEG ratio is 0.21.

By most metrics, this is a pretty cheap stock to buy. However, the stock's price has also undergone a major change in the last few years. So, this doesn't mean that your opportunity, i.e. the opportunity for easy profit for Nvidia, is already created.

The stock's price is currently reflecting a lot of expectations. They are going to release their earnings report next month. If they fail to meet revenue targets, cut capital expenditures (CapEx), sales from data centers decline, or anything else, the stock could see a significant contraction in price, as it is priced too high.

Again, this is a cheap stock. There are a lot of expectations involved with this. You can't measure expectations with fundamentals, right? That's the technical aspect. What is the market doing?

And right now there is a risk of a reversal in the share price, if there is any slowdown in capital expenditure (capex) or if these fears regarding artificial intelligence (AI) come true.

Layoffs of key employees, etc. You can see a pretty big reduction in Nvidia prices.

And I'll be a buyer at any price drop, right? Let me go back to a short-term chart of Nvidia here, so you can look at the chart a little better. Earlier this year, in December, the stock was trading at about the same level and fell sharply.

It was oversold by about three standard deviations. This happened several times.

Historically when a stock is falling and you get about two or three standard deviations oversold, and you use some technical indicator like MACD or whatever, and these momentum indicators show that it's significantly oversold, that's a good opportunity to start buying stocks.

So, now I have the fundamentals. I have a valuation fundamental case for buying Nvidia. But now I want to try to collect stocks by exploiting that fundamental case, when the stock is very oversold, becomes a bit unpopular with the market, etc. Whatever the reason, I want to use these price declines to support a technical oversold situation that presents an opportunity.

This is a good opportunity for me to start buying the stock on price. Most people want to start buying stocks at this stage. The stock price goes up from here, and then people think, "Oh, I have to buy this stock."

So, they started buying the stock. Well, at that moment, it was extremely overdone, wasn't it? Here is the RSI, extremely overbought. And then the stock price drops, right? And then it went back up, and I was like, "Oh, I should have bought it," because then it went back up to a new high.

Yes, that's what happened. And then it became extremely overbought, and then it fell for a few months, becoming very oversold, which was a great opportunity. But, at this stage, people don't want to buy it.

At this point, people start giving various reasons for not buying it. Oh, AI is a temporary craze, or whatever. Look at what's happening to Nvidia's stock price, it's going down.

I do n't want to keep it to myself. But, technical analysis most of the time gives you a pretty good entry point. And again, you can see this repeating over time. Every time the stock was two or three standard deviations overbought or oversold, it was a good entry point.

Every time the stock was two or three standard deviations overbought or oversold , it was a good entry point. When it becomes really overbought, and there are times when it can remain overbought for quite some time, it becomes even more challenging to try to buy the stock.

But, any stock, not just Nvidia, any stock will give you the opportunity to accumulate shares. If you are a little more patient with this, your position will be better.

Again, in recent months, you've had a few good opportunities to buy Nvidia. As you know, we invested in Nvidia quite some time ago. We took some profits off this about 2 weeks ago, because it was really overbought here.

So, again, we technically work with these cycles. In the long term, we fundamentally love the company. We have held Nvidia shares for a long time, and will likely continue to do so in the future.

In the long term, we fundamentally love the company. We have held Nvidia shares for a long time , and will likely continue to do so in the future.

But we work on that position over time: taking profits when something gets really overbought, adding new shares to the position when it gets really oversold, and that helps us understand the market a little better.

Question, what are the downside risks if Nvidia tries to save Coreweave? I do n't know if they will. There has been some discussion about this. But to be honest , this isn't really Nvidia's business.

I mean, they could , but you know, they're in their business. Regarding selling chips. And Coreweav is involved in a neo-cloud business. So, I'm not sure Nvidia can see this as a vertical integration.

Of course. But that's not actually their core business.

And again, many are talking about the possibility of buying Nvidia's Coreweave, etc. I think of two things about this. One, maybe they will, maybe they won't. I really don't have any inside information on whether they will do it or not.

I'm not sure how this fits into their core business, but they could vertically integrate. So, there is some opportunity for that to happen.