Investing your hard-earned money can be daunting, and those picking stocks know how much time and effort can go into such an endeavor. However, over the long term, investing in the stock market is one of the best ways to combat inflation and grow one's nest egg for retirement.
Below is Validea's guru fundamental report for NVIDIA CORPORATION (NVDA). Of the 22 guru strategies we follow, NVDA rates highest using our P/B Growth Investor model based on the published strategy of Partha Mohanram. This growth model looks for low book-to-market stocks that ex
Nvidia (NASDAQ: NVDA) is capitalizing on and supporting the growth of innovations in artificial intelligence. The company's graphics processing units help speed up several aspects of the AI process. This video will take a deep dive into Nvidia's latest earnings call to gain vital
For Immediate ReleaseChicago, IL – March 9, 2023 – Zacks Director of Research Sheraz Mian says, "Total S&P 500 earnings for 2023 Q1 are expected to be down -9% from the same period last year on +1.9% higher revenues. This would follow the -5.8% decline in the precedin
For Immediate ReleaseChicago, IL – March 9, 2023 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your l
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
The S&P 500 edged up on Wednesday after Federal Reserve Chair Jerome Powell did not commit to a 50 basis point rate hike in March, but strong labor market readings supported views that the U.S. central bank will stick to its hawkish policy for longer.
Microsoft said it would license Activision Blizzard's "Call of Duty" (CoD) to Sony for 10 years to address concerns raised by Britain over its $69 billion takeover of the games maker, according to a document published by the regulator.
Sentiment can change on Wall Street as the wind blows; graphics processing unit (GPU) leader Nvidia (NASDAQ: NVDA) declined roughly 59% over the first nine months of 2022. But it has been a different story since October; shares have climbed more than 94% in less than six months.
Nvidia (NASDAQ: NVDA) has three long-term risks that it must continuously overcome, from various geopolitical tensions that can impact revenue and even its manufacturing partners, to the highly competitive nature of the semiconductor business. Check out the short video to learn m
Tesla (NASDAQ: TSLA) is practically the Rorschach test of stocks. You can learn a lot about an investor by finding out what their opinion is on the electric vehicle (EV) maker. Some view Tesla as an unstoppable force. Others think it's overrated.
Nvidia's (NASDAQ: NVDA) fourth-quarter fiscal 2023 results (for the period ended Jan. 29) focused a lot on how the company is on track to make the most of the artificial intelligence (AI) boom. In fact, "AI" was mentioned a whopping 75 times on Nvidia's late-February earnings con
Nvidia (
NASDAQ:NVDA
) stock is a top performer this year, gaining more than
62% year-to-date. Following upbeat Q3 results and a positive outlook reported in February, the stock is likely to remain strong. NVDA has already begun its upward trajectory and has a long growth runway. An overall market pullback due to macroeconomic and recessionary fears could be the only factor pulling the stock down in the near term, if at all. However, given its expensive valuation, I will wait for a better entry point to buy the stock. I am neutral on NVDA.
NVDA's Q3 Beat & Promising Q1 Outlook
On February 22, NVDA reported
upbeat Q4 results topping both earnings and revenue expectations.
Higher Data Center revenues (up 11% year-over-year) were able to offset lagging revenues in NVDA’s Gaming segment (down 46% year-over-year).
On top of that, NVDA provided a Q1 outlook way ahead of analysts’ expectations. As a result,
the stock soared 14% after its earnings release. Notably, for Fiscal Q1 2023, the company expects revenues to grow sequentially by 7% to $6.5 billion. More positively, adjusted gross margins are expected to range between 66%-67% versus the 63.3% reported in the fourth quarter. This highlights the overall pricing power of NVDA’s offerings across its markets.
Initially, there was fear among the investor community regarding weak Gaming and Data Center revenues. However, those fears were completely put to rest during the Q4 earnings call as management expects both segments to report sequential growth in the upcoming April quarter. In fact, the Q4 quarter could be the bottoming out of the Gaming and Data Center businesses.
AI Adoption is at Its Inflection Point, Says NVDA
Generative
AI (artificial intelligence) is the next buzzword in the AI world and is taking the tech world by storm. CFO Colette Kress highlighted during the call that “AI adoption is at an inflection point. Open AI's
ChatGPT has captured interest worldwide, allowing people to experience AI firsthand and showing what's possible with generative AI.”
Within the AI space, NVDA has a winning edge over its peers as its services are all-comprehensive that include AI supercomputers, algorithms, data processing, and training modules. Further, NVDA has an edge in providing AI services across several industries and continues to innovate further.
Amid growing AI demand, NVDA management expects Data Center sales
to register rapid growth throughout 2023, driven by a new AI-as-a-Service business model and innovative product offerings.
For reference, Data Center revenues grew 11% year-over-year but declined 6% sequentially to $3.62 billion during Q4. The sequential decline was attributable to lower sales in China due to COVID-19 and other limitations. Positively, however, annual Fiscal 2022 revenues grew 41% year-over-year to $15 billion.
Importantly, cloud adoption globally continues to grow at a fast pace. Full-year Data Center revenue growth was mainly driven by meaningful partnerships with cloud service providers (CSPs) in the U.S. The CSP partners continue to contribute to the segment's growth by offering AI-as-a-service and giving access to several offerings.
Notably, the new flagship H100 AI supercomputer is already showing robust demand and is now in full production. It is nine times faster than its predecessor (the A100) and 30x faster than comparative transformer-based, large language models. Therefore, it's not surprising that Q4 H100 revenues surpassed A100 revenues, which registered a decline during Q4.
Is NVDA Stock a Buy, According to Analysts?
While NVDA shares fell significantly in 2022, 2023 has been rewarding for the shares. However, they are still 31% lower than their all-time high seen in November 2021.
Given its high valuation (more on that below), Wall Street analysts are cautiously optimistic about Nvidia stock, giving it a Moderate Buy consensus rating based on 25 Buys, six Holds, and two Sells.
NVDA stock's average price forecast of $256.39 implies 10.1% upside potential.
Regarding its valuation, NVDA looks expensive, as it is trading at a P/E multiple of 135x, much higher than the peer group median of 23.4x and its own five-year average of about 60x.
However, it's also important to note that NVDA returned $10.44 billion to shareholders during FY2022 in the form of share repurchases and
dividends. This implies a 1.8% return on the company’s current market capitalization of $580 billion.
Conclusion: Wait for a Pullback
Overall, the semiconductor industry is experiencing a slowdown currently but is expected to recover in the second half of the year, which can add to NVDA's upside potential. Also, the company is well-positioned as one of the pioneering leaders in the AI space as it continues to penetrate across several industries (i.e, its recently-launched AI-on-5G system).
Looking ahead, end-market dynamics for AI cloud adoption remain robust and should present consistent growth for years to come. Still, I believe the excitement regarding AI growth is already priced into the share price. Therefore, it may be prudent to wait for a pullback before buying NVDA stock.
Disclosure
The SPDR S&P 500 ESG ETF is seeing unusually high volume in afternoon trading Tuesday, with over 745,000 shares traded versus three month average volume of about 63,000. Shares of EFIV were off about 1.6% on the day.
The SPDR S&P 500 ESG ETF is seeing unusually high volume in afternoon trading Tuesday, with over 745,000 shares traded versus three month average volume of about 63,000. Shares of EFIV were off about 1.6% on the day.
Nvidia Corp, Advanced Micro Devices Inc and other U.S. firms are scrambling to assess whether they must halt sales to units of China's Inspur Group Ltd after its addition to a U.S. export blacklist last week.
The U.S. is reviewing China's Inspur Group Co Ltd's entity listing and will update it as appropriate, a spokesperson for the U.S. Department of Commerce said.