Visa(US:V) Seeking Alpha·2024-06-23 14:32Core Viewpoint - The article emphasizes caution against the current AI hype and suggests that many tech stocks, particularly in the semiconductor space, are overvalued despite their strong fundamentals [4][14]. Company Analysis - The author has significant holdings in tech companies, including Meta, Nvidia, Amazon, and Microsoft, and believes that while these stocks have performed well, they are now priced above fair value estimates [4][5]. - Nvidia's stock has surged past $130/share, resulting in a forward P/E ratio exceeding 35x, while Broadcom's shares are trading at approximately 28x next year's consensus EPS estimate, both of which are considered too high for new investments [4][11]. - Visa is highlighted as a strong investment opportunity, with a history of consistent earnings growth and a current P/E ratio of 28.6x, slightly below its 10-year average of 29.2x [9][12]. - Visa has demonstrated a compound annual growth rate (CAGR) of 32% in dividends since its IPO in 2008, and analysts predict continued double-digit EPS growth of 13% this year and 12% next year [8][9]. Valuation Insights - The current price target for Visa is estimated at $280 based on a conservative forward P/E of 25x, with potential for the stock to reach $300 if EPS exceeds current estimates [11][12]. - Historical trading patterns suggest that Visa typically trades in the 27x to 32x range, indicating a potential stock value of $300-$360 in the near future, representing an annualized return of approximately 23% [12][13]. - The article concludes that Visa remains a reliable investment despite regulatory risks, with a strong market position and a business model that is expected to thrive in a cashless society [14][15].