It's prime time for holiday shopping and investors should be no exception. In fact, 2022 left many great stocks trading at steep discounts, despite their businesses' long-term strength.Some stocks saw their prices affected by short-term headwinds while others seem to simply get c
The United States has been a leader in microchip design with dominant companies like Nvidia, Intel and Qualcomm, but it risks a big drop in global market share without government support for the sector, warned a report released on Wednesday.
The S&P 500 ended down on Tuesday, with losses in Apple and Amazon ahead of an upcoming speech by U.S. Federal Reserve Chair Jerome Powell that could provide hints about magnitude of future interest rate hikes.
The iShares ESG MSCI USA Leaders ETF is seeing unusually high volume in afternoon trading Tuesday, with over 609,000 shares traded versus three month average volume of about 163,000. Shares of SUSL were down about 0.6% on the day.
Shares of GPU kingpin Nvidia (
NASDAQ:NVDA
) have endured a lot of damage amid the broader market sell-off. Even after losing two-thirds of its value from peak to trough, Nvidia still commanded a premium valuation multiple. However, it likely deserved to, given its virtually unmatched growth profile and ability to execute. Therefore, I am bullish on NVDA stock.
Nvidia is arguably one of the most exciting stories in the large-cap semiconductor space. With a brilliant founder CEO in Jensen Huang and a massive (and seemingly growing) total addressable market encompassing many of the hottest trends in tech, it's tough not to be enticed by Nvidia while it's still down more than 50% from its peak.
Over the year, the company has run into various hurdles, including America's ban on top chip exports to China. Indeed, such a ban could take a big bite out of sales for an unknown period. Still, there are reasons for hope, with Nvidia recently shedding light on a
"slower" chip that can still be sold to the Chinese market in accordance with a U.S. ban.
At this juncture, little is known about how deeply such export bans will cut into top semiconductor companies. Regardless, the move introduces a lot of uncertainty into an already cloudy (and expensive) growth story ahead of a global economic downturn. Investors hate uncertainty, and there's no shortage of it in 2022.
As Nvidia looks to navigate around hurdles while navigating a harsher environment, I do view Nvidia as an intriguing growth option, even as this market continues to turn a shoulder on high-multiple growth stocks. In my mind, Nvidia stands head and shoulders above the pack in the semiconductor space.
Recession and Geopolitical Tensions Could Exacerbate Sales Pressures for Nvidia
With a recession around the corner and a U.S. export ban that could exacerbate sales pressures, the recent downfall in Nvidia stock seems more than warranted. There's also some risk that geopolitical tensions could induce more such bans to keep top innovations out of the hands of China. Indeed, it seems like an export ban will just result in a lose-lose situation.
Nvidia will need to comply and pay the price. Though the company has an advanced solution that goes around U.S. ban criteria, one has to wonder if federal regulators will make amendments moving forward. Further, it's unclear how much demand would be impaired by such a ban.
In any case, Nvidia's caught up in the midst of a U.S.-China chip war. It's a scary situation for Nvidia shareholders to be in. However, I do think there's a lot of regulatory risk that's already baked in. Further, the export ban goes to show just how powerful Nvidia's latest and greatest chips are. By the time a Chinese firm creates a comparable chip, Nvidia may already have raised the bar, perhaps significantly.
Nvidia Stock May Not be Expensive Relative to Its Growth
Undoubtedly, Nvidia is one of the market's hottest growth kings, and its premium may not be high enough considering longer-term secular trends that could power demand over the next decade and beyond. For now, there's a lot of focus on near and medium-term headwinds. Nvidia has company-specific issues it will need to tackle in addition to industry headwinds.
The video-gaming and data center segments have shown subtle signs that they're not immune to the forces of a downturn. Further, COVID-19 lockdowns in China and a challenged consumer balance sheet may also impact quarters to come.
Even as weaker activity in gaming, crypto, and the data center weighs on demand in 2023, I think it's tough to overlook the long-term fundamentals. At the end of the day, Nvidia produces the technology that could power the hottest innovations of the near future. It's not easy to gauge when and how fast demand will pick up while everybody is focusing on the recession-induced damage to come.
Is Nvidia Stock a Buy?
Turning to Wall Street, NVDA stock has a Moderate Buy consensus rating based on 21 Buys and seven Holds assigned in the past three months. The average Nvidia price target is $196.15, implying upside potential of 26.17%. Analyst price targets range from a low of $133.00 per share to a high of $320.00 per share.
Conclusion: NVDA Shares Remain Vulnerable to Rising Rates
At writing,
NVDA stock trades at 69.2 times trailing earnings and 14.2 times sales. That's still quite expensive. Undoubtedly, such a lofty price tag leaves Nvidia vulnerable to a further increase in interest rates (5-7% could prove detrimental to the stock). That said, Nvidia is behind some of the most impressive chips out there. There's a reason why the U.S. doesn't want top chips exported to China. Further, there's a good chance NVDA stock deserves an even higher multiple, given it's on the very cutting edge of semiconductor innovation.
Disclosure
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Semiconductor ETF (Symbol: SMH) where we have detected an approximate $410.5 million dollar inflow -- that's a 6.2% increase week over week in outst
U.S. stocks ended sharply lower on Monday after protests in major Chinese cities against strict COVID-19 policies sparked concerns about economic growth, while Apple Inc slid on worries about a hit to iPhone production.
U.S. stocks ended sharply lower on Monday after protests in major Chinese cities against strict COVID-19 policies sparked concerns about economic growth, while Apple Inc slid on worries about a hit to iPhone production.
Wall Street stocks tumbled on Monday as protests in major Chinese cities against strict COVID-19 policies sparked concerns about economic growth, while Apple Inc slid on worries about a hit to iPhone production.
Wall Street's main indexes fell on Monday as protests in major Chinese cities against strict COVID-19 policies sparked concerns over economic growth and dragged commodity-linked shares lower, while Apple slid on worries about a hit to iPhone production.
Looking at the universe of stocks we cover at Dividend Channel, on 11/30/22, NVIDIA Corp (Symbol: NVDA), Vontier Corp (Symbol: VNT), and Shutterstock Inc (Symbol: SSTK) will all trade ex-dividend for their respective upcoming dividends. NVIDIA Corp will pay its quarterly divid
In today's video, Jose Najarro and Nick Rossolillo discuss Nvidia (NASDAQ: NVDA), its most recent earnings, and why the bottom might be near for this semiconductor giant. Check out the short video to learn more, consider subscribing, and click the special offer link below.
Wall Street's main indexes fell on Monday amid worries about protests in major Chinese cities against strict COVID-19 policies, although gains in Amazon helped limit losses as Cyber Monday sales were set for a record.
Although AMD (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA) have different product lines, they still compete against each other in some offerings. As a result, the two are often compared, with Nvidia often coming out as the better company up until a few months ago.
Wall Street's main indexes were set to open lower as protests in major Chinese cities against strict COVID-19 policies reignited concerns about economic growth, while Apple slipped on a report of disruption in production at a factory in China.
As 2022 starts to close, it's only natural for investors to start peeking toward 2023. So far in 2022, the indexes have fared pretty miserably, with the Nasdaq-100 down 29% and the S&P 500 down 17%. Which one will have a better 2023?Let's look at these indexes and their makeu
U.S. stock index futures fell on Monday as protests in major Chinese cities against the country's strict zero-COVID policy re-ignited concerns about economic growth, while Apple shares slipped on a report of disruption in China production.
The stock market has been intimidating for beginners this year. Major stock indexes are falling, and several factors are keeping volatility high. This makes it difficult for new investors to choose stocks to buy and hold. Luckily, there are key characteristics that can help inves