Nasdaq NVDA Nvidia

What happened Nvidia (NASDAQ: NVDA) stock dropped in Wednesday trading and is down 2% as of 11 a.m. ET, and bad news out of China may be the reason.

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Check Out These Virtual Reality Stocks In The Stock Market TodayIf you have been following the stock market news, chances are you’ve heard of the latest buzzword, metaverse. While the metaverse isn’t a new concept, the broad and sweeping adoption for its future potent

Cryptocurrencies have seen a lot of volatility in recent weeks. Bitcoin prices have plummeted by almost 25% from their November highs to levels of about $51,000 currently, although they have recovered a bit from recent lows of about $46,000. The decline comes as the U.S. Federal

Nvidia (NASDAQ: NVDA) stock has had a legendary run over the past decade. Its price has risen an astounding 663%, 1,150%, and 7,940% over the last three, five, and 10 years, respectively. Started in 1993 by Jensen Huang, Nvidia began in PC graphics and changed the world when it i

What happened Shares of semiconductor-specialist Nvidia (NASDAQ: NVDA) are fluttering around a bit in Tuesday trading. After jumping higher at the open, Nvidia stock quickly gave up its gains and headed lower, hitting a 2.3% loss as of 10:30 a.m. ET.

If you want to create generational wealth, there is no better vehicle than investing in stocks. They're better than gold, bonds, collectibles, and just about every other asset out there. While over short periods of time, one asset class or another may outperform stocks, the long-

Texas Instruments (NASDAQ: TXN) has been a resilient stock this year, even as supply chain challenges and inflation-related fears have rattled the tech sector. The semiconductor maker's stock has also consistently outperformed the S&P 500 over the past three, five, and ten ye

The S&P 500 was on track to open at all-time highs on Tuesday, building on a record-setting rally amid thin trading volumes, with investors unshaken by Omicron-driven travel disruptions and store closures.

The NASDAQ 100 Pre-Market Indicator is up 63.44 to 16,630.94. The total Pre-Market volume is currently 17,691,607 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro Short QQQ (SQQQ) is -0.09 at $5.60, with 2,879,438 shares trade

The NASDAQ 100 Pre-Market Indicator is up 63.44 to 16,630.94. The total Pre-Market volume is currently 17,691,607 shares traded.The following are the most active stocks for the pre-market session: ProShares UltraPro Short QQQ (SQQQ) is -0.09 at $5.60, with 2,879,438 shares trade

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Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) have been top performers on the stock market this year, with shares of both high-flying chipmakers crushing the broader market easily.

In many ways, 2021 has been a year like no other. The pandemic has dragged on, introducing frightening new variants, resulting in many false starts and stops for the underlying economy. Even as the benchmark S&P 500 has gained a remarkable 25% so far this year (as of this wri

Elon Musk isn't a fan of the metaverse. He told satirical website The Babylon Bee last week that he's "currently unable to see a compelling metaverse situation."

Nvidia Corporation (NVDA) is one of the hottest tech stocks in the market at present, with a staggering 750% gain in the last three years. Though the final month of 2021 has been a bit unpleasant for the stock as it has lost a chunk of its value, Nvidia has already started on its journey towards recovery. The market is also bullish about this stock because this graphic specialist still has an incredible number of opportunities to grow its revenues and expand its margins over the coming years.  

Nvidia is a globally recognized designer and seller of computer graphics processors, chipsets, and related multimedia software. It primarily operates through two segments: Graphics, and Computer & Networking. The Graphics segment designs graphics processing units for the gaming and professional markets around the globe, while the Computer & Networking segment sells chip units to the mobile computing and automotive markets.  

Nvidia has been dominating both the markets in which it operates. To give context, its market cap has grown at a much faster pace compared to that of Apple's (AAPL) in the past decade. However, because of it has grown so fast, the biggest challenge Nvidia is facing these days is justifying its rich valuation. Considering its future prospects, the markets believe the company can successfully preserve the value it has created over the years for itself.

William Stein of Truist Financial is one of the analysts who think the same. He has raised his average price target to $389 from $360 and has maintained a Buy rating on the stock. Moreover, he has stated that Nvidia warrants a higher multiple and that its dominancy in the semiconductor and software technology space will drive its structural growth.

Moving Towards a Metaverse

The Metaverse warrants the usage of various technologies like augmented reality, virtual reality, and video streaming, and requires parallel and superfast computations. Nvidia, through its industry-leading high-throughput graphics processing unit (GPU) chips, has made a big push into metaverse applications. The company has a range of next-generation hardware technologies for supporting the metaverse like its GPU’s or the recently launched Grace CPU or be it the next-generation Bluefield data processing unit.

Moreover, going beyond hardware, Nvidia has also come up with its Omniverse, and has introduced the Omniverse Replicator synthetic-data-generation engine and Omniverse Avatar. Omniverse is a scalable, multi-GPU, and real-time software-development platform, the development of which is aimed at enabling real-time collaboration amongst the global 3D-design teams who are working on multiple software platforms.

As per Gartner estimates, AI software spending is about to reach $62 billion next year, which is an increase of 21% over 2021. Nvidia has said over 700 organizations are evaluating the use of its Omniverse so it would be a great opportunity if the metaverse takes off.

Strong Financial Performance

Nvidia has been an excellent performer over the past few years. The company’s gross margin has steadily improved over the past 10 years, resulting from the shift in its sales to the more powerful graphics processors that command higher prices across gaming and data center segments. In the coming years, the newly growing software avenues (e.g., license fees from Nvidia AI Enterprise and Omniverse) should also contribute to improving its gross margin.

As per its latest third-quarter financials for the fiscal year 2022, Nvidia’s financials showed that, within the first nine months of 2021, it has achieved a revenue of $19.3 billion, which is 65% higher compared to the prior-year period. Its earnings per share went up to $3.12 per share, indicating a massive 81% growth.

Besides for that, in the three-month period ending 31st October 2021, there has been a 91% improvement in the company’s operating income, and sales for the quarter have grown by more than 50%. Revenue from its Data-center segment saw a 55% growth, while Gaming Chip revenue grew by 42%. 

The Tipranks’ Stock Investors Tool indicates 24 out of 26 analysts have given Nvidia a Strong Buy rating, whereas the remaining two have suggested a Hold on its shares. The highest price target for the stock is $400, which is a potential upside of a little over 38% from its December 22 closing price of $290.75. The average Nvidia price target is $360.17, which is a healthy 16.4% upside on the stock.

Multiple Growth Aspects

Even without the metaverse opportunity, Nvidia still has a lot of room for growth. The pandemic had fueled demand for the company’s chips in home computing, video games and data centers, to the extent that it led to a global shortage. To curb this shortage, Nvidia is now working towards increasing its GPU Supply and expects to ease the shortage by the middle of 2022.

Other than that, the PC market forecast for 2022 suggests the demand for gaming computers is expected to remain strong, as the overall computer graphics market might reach $138 billion in value. Gaming PCs are expected to hit $37 billion in revenue in 2022. Nvidia, having access to an over 80% share of the market, is in a perfect position to grab the benefits.

Also, as cloud gaming is growing around the world, Nvidia's new cloud gaming service could potentially become another driver for the company’s growth. Furthermore, crypto demand would also indirectly benefit the company, as Nvidia chips are used in the mining of cryptocurrencies. 

Nvidia has all the qualities of a top-performing stock and can continue to remain a top growth stock in 2022 and beyond. On a fundamental level, the company’s earnings and sales are showing good growth. Also, its adoption of metaverses and cryptocurrencies could enable it to continually churn out healthy growth rates in the coming times as well. Therefore, investors shouldn't be concerned about the short-term price fluctuations in Nvidia, and might want to consider this stock.

Disclosure: At the time of publication, Hashtag Investing did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates  Read full disclaimer >

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