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Citron's Andrew Left: Move Your Money From Nvidia To Google

Citron's Andrew Left: Move Your Money From Nvidia To Google
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Shortseller Andrew Left advised NVIDIA Corporation (NASDAQ: NVDA) shareholders Friday to pack up and move to Alphabet Inc (NASDAQ: GOOGL), where they’ll find equally “sexy” opportunities in artificial intelligence, datacenter and autonomous driving but with less risk of downside.

Left entertained an early appreciation for Nvidia and predicted its initial rise. But now, even as the stock boasts market cap addition greater than the total valuation of competitor Advanced Micro Devices, Inc. (NASDAQ: AMD), red flags abound.

With the current multiple signaling a 10-year peak, gaming chip sales decelerating, accounts receivable “exploding” and datacenter competition rising, Left cautioned investors to disregard “irresponsibly bullish” analysts.

Citi analysts, in particular, have doubled their price target from $90 to $180 over the last seven months in spite of weakness in the company’s gaming business.

“While we are fans of NVDA emerging business in auto, gaming, and AI … have the prospects of these technology doubled in value in 6 months or is this an example of analysts chasing stock price?” Left wrote in a note.

Left said the sheer number of calls and exodus of institutional investors ought to scare potential investors.

He attributed recent stock purchases to faith in the company’s AI, datacenter and autonomous driving prospects and noted that Google has a much stronger core business.

Nvidia shares continued to make new highs Friday morning -- hitting $168.50 shortly after the open -- until Left's note hit. At time of publication, the stock traded at $156.95, down about 1.9 percent on the day.

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