Paul Meeks is on CNBC’s Squawk Box to discuss Nvidia’s growth and the post -report. Watch here for the full interview.
Transcription:
CNBC
So how should investors play the stock heading into earnings? Joining us now, harvest portfolio management CIO Paul Meeks, who holds Nvidia. You hold a sizable amount of Nvidia, Paul. So how have you been thinking about this stock leading up to today? And how are you thinking about it after tonight's print?
Paul Meeks
So leading up to today? Of course, I own it many fold lower, and I am not necessarily worried about the fundamentals that they're going to report, specifically the revenue and EPS and even the revenue and EPS guide. I do have a little bit of anxiety around this purported manufacturing glip for Blackwell chips that was never reported or confirmed or denied by the company itself, but it was reported in the periodical, the information, a couple weeks back. And the way I look at it is that gives me enough anxiety to not add to my position ahead of tonight's call. Of course, I'll be on that call life. But I believe so strongly that the hyperscalers will continue to spend on AI's gpu's and they have the financial wherewithal to follow up on their aggressive capex plans like no other companies around the world can. That if there is some near term turbulence, is there some near term controversy today on the call? And it does trigger a, not a small drop back, but a significant drop back. I'm probably in, and I'm probably in buying with both hands.
CNBC
What level would you say would be a significant pullback? Stocks at about $125 right now.
Paul Meeks
Yeah, so we had that nasty drop in July. The stock today is still trading 14% below its high of 140 ish. I think if we have another correction, when I say correction, I define that as 10%, I might be more long term interested. Of course, the volatility in this name is so extreme that if you had a very bullish print or a very bearish print, this stock could move ten or 15% tomorrow.
CNBC
So did you buy then during late July, early August? I think we're up 60% since August 5. Did you pick some up?
Paul Meeks
I did, in client accounts where I held it. I just continued to hold it in some client accounts that were onboarding at that time. I indeed started a position. So that was at least a good short term trade. And of course, the long term trade has been marvelous. We'll see what goes from here. I would tell people that just because the stock tripled last year and is working on a double plus this year, the stock is still trading at, quote unquote, only about 38 times EPS for next year, and EPS next year is supposed to grow at about the same rate. So we call that peg parity or a one peg ratio pe to growth, which indicates it's not necessarily that expensive of a stock. And so if the are there, I'm still encouraged.
CNBC
So, given all of that, as a fundamental investor, I'm curious how you think about this name with the, you know, three x levered ETF's that are out there with all of the options activity, with all of the retail momentum. You know, how do you kind of assess these moves relative to fundamentals given just technical natures that may defy your expectations for the directionality of where it goes?
Paul Meeks
Yeah, well, that's one of the reasons why even though I love this company and I love this stock, I'm not buying it ahead of this print, because just things are so volatile. And it's not just tech traders like me trading the stock, but everybody and their brother. So yes, that brings volatility and that brings volatility in trading. Some people that are often misinformed and they can overreact to what I think are temporary problems rather than secular problems. And so any reveal today that is not a twelve out of ten could be received negatively.