Nvidia stock flashes ‘biggest green flag'; $250 next?

Core Viewpoint - Nvidia's stock is showing strong performance ahead of its Q3 earnings release, with potential to reach its record high of $250 despite a recent drop to $188 [1][2]. Stock Performance - Nvidia's stock price has increased from approximately $46 per share in 2023 to around $188, while its valuation multiple has decreased from 158x to 50x earnings, indicating a sustainable bull market [2][4]. - The pattern of rising stock price alongside contracting valuation multiples suggests that Nvidia's earnings growth is outpacing stock price appreciation, driven by fundamental performance rather than speculation [4]. Q3 Earnings Outlook - Nvidia anticipates $54 billion in revenue for Q3, representing a 54% year-over-year increase, with gross margins projected at 73.3% (GAAP) and 73.5% (non-GAAP) [5]. - Operating expenses are expected to be $5.9 billion (GAAP) and $4.2 billion (non-GAAP), with analysts predicting adjusted EPS of $1.25, up from $0.81 last year [6]. Market Sentiment - Despite the positive outlook, some market participants express caution, including investor Michael Burry, who has warned of a potential bubble and has placed bearish put options on Nvidia shares [8].