Nvidia (NVDA): Profit-Taking

Nvidia (NVDA) popped more than 12% in Thursday trading following a relatively mediocre earnings report. However, key to its pop were comments made by CEO Jensen Huang directed at the market’s new hotness – Artificial Intelligence (AI). Given that Nvidia’s semiconductors provide the backbone for the majority of AI development, Huang believes Nvidia will see huge returns.

As a result, NVDA exceeded the portfolio’s target position allocation size of 7.14% and triggered my next sell order which filled at $234.47, locking in +19.96% in gains on shares purchased for $195.45 back on April 22, 2022. While normally I might let a position “run hot” for awhile and exceed its allocation, I felt profit-taking would be prudent given that Nvidia’s rocketed +117.42% off its $108.13 low just a few months ago in October.

The sale lowered my per-share cost -$11.72 from -$13.45 to -$25.17 (a negative per-share cost indicates all capital has been removed in addition to $25.17 per share added to the portfolio’s bottom line in addition to each share’s current value).

Given the fervor for AI, I am going to let Nvidia run a little hotter from here with my next sell target at $288.79, just under NVDA’s 2022 high. My next buy target is $141.36, above a key point of support in 2022.

NVDA closed the week at $232.86, down -0.69% from where I took profits Thursday.