Is NVIDIA a Great Investment?

PHOTO CREDIT: NVIDIA

OVERVIEW

Why You Should?

  1. NVIDIA has got most of its revenues from its graphics segments. However, the company has entered new businesses like data centers, autonomous driving, and machine learning. These new businesses are the future of the entire world’s computing needs and NVIDIA will benefit greatly from the ultimate transition to these systems.
  2. NVIDIA has benefited from the COVID-19 Pandemic due to a spike in video game users around the world. Devices like the Nintendo Switch use NVIDIA GPUs and NVIDIA has also seen a spike in sales for its graphics cards and other video game chips and infrastructure. This growth during a pandemic will help the company’s future growth.
  3. NVIDIA has seen market share spike in extremely valuable sectors around the world. The GPU industry will see strong growth and will be worth over 200 billion dollars in 2027. The semiconductor industry will also see parabolic growth due to a spike in demand for data center, artificial intelligence, supercomputing, autonomous driving, machine learning, and more. This will benefit NVIDIA’s stock price.
  4. All of these factors bode well for NVIDIA’s strong future growth. Though the revenue and profit might not show these future expectations, NVIDIA’s current acquisitions, like ARM holdings, position it well for the future of the semiconductor industry. NVIDIA’s stock will benefit if the company can capitalize on this new growth. The company’s reported revenues of around 10.9 billion and profits of around 2.8 billion in the financial year of 2020. In the financial year of 2019, the company reported revenues of around 11.7 billion and profits of 4.1 billion. The financial year of 2020 was tough for them and the company looks to get out of that slump and continue to grow in the future.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. NVIDIA currently trades at over 500 dollars a share, which means that it trades over 100 times earnings. I would wait for the stock price to fall slightly before putting money in this great company.

MY OPINION

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.