A Few Excellent Stocks Trading at or Near Fair Valuation that are Worth Adding to Positions.... [AMZN, AMAT, NVDA]

 I will be adding modestly to my current positions in the following stocks that are trading near fair valuation that have strong growth projections:  Amazon [AMZN], Applied Materials [AMAT], and Nvidia [NVDA].  My goal is to buy high quality growth stocks (especially tech/AI related) at a reasonable price that have significant upside potential over the next 2-5 years and longer. 

Regarding Amazon, here is a 10 year chart of it's performance with analyst projections through FY2027: 

The black trace is the history of the stock price up to the present.  The price has generally been following the black "current valuation" line pretty well.  The red line is a projection for the next two years given the stock price continues to follow the "current valuation" line.  It shows potential for the stock to hit $365/sh by the end of 2027.  This is very close to the numbers from my June 27, 2025 article on AMZN.  This would represent a total return of about 60% and an annualized return of 23%!  

The following image depicts the 10-year performance of a $10,000 investment in AMZN versus the S&P500.  Amazon's 22% compound growth handily beats the S&P500's 15% compound growth.  Past performance is not a guarantee of future peformance but it is meaningful to me. 

--------------------------------------------------------------------------------------------------------------------------

Regarding Applied Materials (AMAT), here is a 10 year chart of it's performance with analyst projections through FY2027:  

Applied Materials is expected to have some slowdown in growth in FY26, with growth then re-accelerating in 2027. The stock looks fairly valued for one of the semiconductor companies and it has an S&P credit rating of A. 

In looking at the 10-year performance of AMAT versus the S&P500, AMAT has thrashed the S&P500 with a 28% compound growth versus 14%.  I view AMAT as a Buy here with a holding period of 2-5 years plus.  


 -------------------------------------------------------------------------------------------------------------------------------

Despite all the negativity surrounding Nvidia lately, the 10-year chart from Fastgraphs indicates that it is near fair valuation. It's growth projections are forecast to slow down some (not surprising) from 2025 through 2028, but double digit returns for EPS are projected.  I think NVDA is a hold here or one can add to existing positions, but it's not at "back up the truck valuation" presently.  

The 10-year compound growth of NVDA is one of the most, if not the most, impressive of any company out there.  However, one cannot expect the same growth going forward.  Even if the growth is cut by one half compared to the past 10 years, it would still be one of the strongest growth stories out there.  I also view NVDA as a long-term Hold position, and adding some to an existing position would probably not disappoint investors.  

Feel free to leave me a comment.  Thanks for reading! 

References: 

Disclaimer: This blog has been created for sharing my personal investment ideas only. I do not receive any compensation for this blog or the content within. I am not an investment advisor or professional. This blog is my own personal opinion and is not meant to be a recommendation of the purchase or sale of any stock or ETF. Please do your own due diligence and research before deciding to purchase any investments of your own.

Comments

Post a Comment

Popular posts from this blog

AMAT (Applied Materials) is Trading at near Fair Valuation for those in Search of a Great Semiconductor Company!

Image
This morning, August 25th, 2025, I purchased a small amount of shares of AMAT.  The Fastgraphs chart below shows that the stock is trading at near fair valuation.  Thus, we have a great semiconductor company trading at near fair valuation.  If the stock falls more, I will add to my share count and dollar cost average down.     Here is a screen shot of the past 13 year performance of AMAT versus the S&P500:  Notice on the 13-year performance screen shot that with dividends reinvested, a $10,000 investment in October 2012 would be worth $184,000 today versus $56,000 for the S&P500.  AMAT had a compound growth of 25.51% versus a respectable 14.51% on the S&P500.  AMAT's dividend growth rate and compound dividend growth rate were 13-14% which is solid.   I am always in search of great companies that are trading at a fair valuation that have a history of thrashing the S&P500.  They can be difficult to find bu...
Read more

Updated Price Targets for Amazon (AMZN) through 2027

Image
    Although Amazon (AMZN) is minus 1% YTD in 2025 as of close on 6/26/2025, it's 1-year performance was +12.14% and 5-year performance was +61.26%, nothing too glamorous.  Individual investor gains or losses will, of course, depend on what price(s) they bought shares at.  Valuation is hugely important when it comes to investment gains/losses.   When valuating Amazon, the Adjusted Operating Earnings (a metric used for most stocks) does not typically correlate well historically with the stock price.    AMZN:  Price Correlated with Adjusted Operating Earnings       Instead, a more reliable valuation metric is the price correlated with operating cash flow (OCF) seen in the chart below:  AMZN:  Price Correlated with Operating Cash Flow (OCF)       Since December 2022, the stock price has been following closer to the black line (current valuation), as opposed to the Normal P/OCF (blue line) or the Fair Valu...
Read more