NVIDIA (NVDA) recently had its earnings report in which they reported $3.66 earnings per share for the quarter, beating the consensus estimate of $3.28 by $0.38. They recorded revenue of $5.66 billion, up 84 percent from a year earlier and up 13 percent from the previous quarter, with record revenue from the company’s Gaming, Data Center and Professional Visualization platforms. Gaming revenue of $2.76 billion, up 106 percent from a year earlier. Record Data Center revenue of $2.05 billion, up 79 percent from a year earlier.
NVDIA is still undervalued with multiple price targets very much higher than the current price of what NVDIA is trading at currently along with multiple buy ratings. One example in specific, Bank of America recently upgraded NVDIA price target to $900 from $800 and reiterated its Buy rating. The bank said its takeaway is that “rising AI adoption, expanding use-cases across cloud, enterprise, edge, telco can help NVDA double its content and triple its data center sales over the next few years.” Bank of America said it expects NVIDIA’s data center business to grow at a 35% compounded rate to become its largest segment by year-end 2025. Other notable price targets include 854- Jefferies, 800- Robert W Baird, 800- Rosenblatt Securities.
- Acquisition of ARM
ARM can’t stay independent for long, even the CEO thinks so. Arm CEO Simon Segars made the case that if it stays independent, Arm wouldn’t be able to keep up with the increasing demands of its customers for more complex chips that can perform a wider variety of functions. The simple solution? Getting acquired by another company. NVIDIA seems to be in the lead to acquire ARM and other rivals are terrified. They have a good reason to be, as NVDIA already a strong leader wants to spend $40 billion to acquire U.K. chip technology provider Arm Holdings. This acquisition will reshape the industry entirely. NVIDIA CEO, Jensen Huang said the acquisition of ARM is an opportunity to create a company that can generate even more new ideas, and bring more innovation to its customers in the form of intellectual property. A quote in specific, “The benefit to the market, and to the Arm customers will be more IP, better IP, more accelerated road maps and hopefully taking Arm to the far reaches of what is becoming …the diversity of computing that is literally going in every single direction,” Huang said. “You’re covering everything from cloud, to edge, to [internet of things], to high performance computing, to microprocessors, to accelerated computing—everything.”
2. Internet currency ( Not allowed to say actual word so replaced it with internet)
GPU’s can be used for internet currency and its mining purposes. It’s possible to blame the graphic card shortage on these miners but nonetheless, the usage of them is highly prevalent today. NVIDIA’s releases of processors specifically used for mining poses a huge boost to its revenue and to the internet currency world. NVIDIA booked $155 million in revenue from CMP cards in its fiscal first quarter. While internet money is gaining traction around the world, we can expect NVIDIA to continue its dominance and reliability in mining purposes.
3. Stock split
On May 21st, NVIDIA announced a 4-1 stock split which would take place on July 19th. So for every one share you own, you will own four instead as the stock splits its price valuation by four. On the day of the news, NVIDIA’s stock price closed at $599.67. Since then, the price of NVIDIA’s stock has gone up around 24% to $743.75. Not even one month has passed and the stock is up 24%! With one full month until the split I predict NVDIA to hit $800 or/and above by the time of the official split. Call options and shares in my opinion are the way to go for the next month as this could be a great opportunity to invest in a fast growth company.
NVIDIA has been a great growth tech stock to own recently with the numbers backing this statement up.
NVIDIA beats Intel and AMD in every single category growth wise showing complete dominance with its stock price.
Concluding I believe NVIDIA is a must buy presplit and the risk is minimum. The stock shows solid uptrend with extreme growth to come. NVIDIA is a strong buy in my personal opinion and an amazing company to be invested in.