Want to start an Nvidia position but think it's too late? The stock hit an all-time high on Thursday and has quickly dropped 7% since then. We know that Nvidia can swing wildly in the near-term. With earnings coming up on Wednesday evening, we feel that a "beat and raise" quarter is the minimum requirement. It's been the bar for years now, as we wrote in Sunday's earnings preview. Even if that bar is cleared, there are so many moving parts that there's no telling where the stock might trade after the release. We tend to like it when a hot stock cools off a bit ahead of the print. How does that line up with Jim Cramer's column from a couple of weeks ago, when he wrote about the reasons why it might not matter if you are "late" in buying stocks tied to the secular artificial intelligence boom? Listen to Nvidia CEO Jensen Huang talk about AI being the fourth industrial revolution, and the next leg of agentic AI needing 100 times more computing power than currently available, and it might still be early. And, Amazon CEO Andy Jassy? He told Jim earlier this month that investors will reap rewards from all the company's AI spending. It's generally not our style to chase stocks near record highs, nor do we love buying a stock right into an earnings release — even if you're right on the numbers, the price reaction is too hard to game. However, for those without an Nvidia position on the books currently, here is where we stand. During Monday's Morning Meeting, Jim said, "If you wanted to buy some here, I totally endorse it. I just feel that we own it, we don't wanna trade it." Sure, it's hard to think it's anything but late when Nvidia and other stocks have exploded higher in the past three years. But, to never start a position because you are worried that you missed rallies that have already transpired, when the long road ahead looks primed to run, would violate No. 13 on Jim's list of investing rules, "No woulda, shoulda, coulda." If you have not started a position in Nvidia yet, don't let your past inaction prevent you from getting on board. Jim has repeatedly and openly talked about mistakenly exiting Alphabet in March 2025 on concerns about AI and federal litigation. It quickly became apparent that AI was not a problem, and neither was the government. The Club re-initiated a position in the Google parent in late December 2025 after a huge run higher. We built it up over time, and we're sitting on unrealized gains of 30%. We think that's only the beginning. Owning the past mistake and recognizing that Alphabet was on a winning path was not easy. But it was necessary. Back to Nvidia, from a valuation perspective, there really isn't much to debate. Compared to peers, the stock is clearly undervalued from a price-to-earnings standpoint. Forward earnings-based valuations, Broadcom (also a Club name) trades at 28 times, Marvell at 39 times, Advanced Micro Devices at 44 times, and Intel at 86 times. Nvidia clocks in at only 24 times forward earnings, despite being the name at the heart of the entire AI trade. It has more tentacles than any other company, thanks to a streak of high-profile investments into both key data center suppliers and customers. The issue, as we see it, is given the material valuation discount to peers, expectations for continued earnings growth, and an earnings catalyst on the near-term horizon, should you continue to wait before buying? Warren Buffett once said, "Investing is simple, but not easy." The simple part is the idea that you can teach pretty much anyone the mechanics of investing, or how to read financial statements or stock charts. What's not easy is controlling your emotions and maintaining discipline. That's arguably the single most important factor to being a successful investor over the long-term. I don't care who you are; it is not easy to watch a name you believe in lose over one-third of its value in a short period of time, as we saw with our cybersecurity holdings earlier this year. It's even more difficult to do what you know you must when the stock is doing the opposite of what you believe the fundamentals dictate, buy more. That's what we did. We bought CrowdStrike twice when the stock was being hit in February and March. The market has finally come around to our way of thinking that AI won't reduce the need for cybersecurity but increase it. On Monday, we trimmed CrowdStrike to protect some of those hard-fought gains. One way to keep your emotions in check is to examine the risk-reward. Nvidia is viewed by many as being a frontrunner to reach the fabled $10 trillion market cap, which implies some 82% upside from here. NVDA YTD mountain Nvidia YTD Technical analysis puts potential support somewhere in the $217 range (the old high), based on the Polarity Principle (old resistance once overcome, turns into support), which represents a little over 2% downside. So, now you need to consider your longer-term outlook. If you are with us in the camp that this name can be worth $10
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