Fintechzoom has highlighted the potential of NVIDIA stock especially when the company is in the process of developing a new AI chip. And if you are unaware, this new AI chip will be quite useful for generative AI applications, which again are in trend. In this article we will take a look at NVIDIA fintechzoom analysis, we will also analyze the market trend of NVIDIA stock, and the challenges lying ahead of this company.
Firstly, we will discuss the performance of NVDA stock and then look at the evolution of this company including key events that matter to analyze this stock. Lastly, we will talk about the investment strategy for NVIDIA stock with the experts’ advice given by Fintechzoom!
Performance of NVIDIA Stock Fintechzoom
If we take a look at the performance of NVIDIA stock in the past 1 year, you will notice that between August 2023 to August 2024, NVDA stock has gained price by approximately 150%. The main reason behind this skyrocketing performance is AI and data center markets.
And during this past 1 year, the stock has touched a 52-week high of $140.76 and a low of $39.23. As per FinanceCharts, the company’s annual revenue is projected to be $123.15 billion in 2024, which is double the annual revenue of 2023. Also, the nature of the market has remained bullish towards this stock.
Talking about the current performance of NVIDIA stock fintechzoom performance, the stock is experiencing some fluctuation however Stock Analysis has predicted an upside projection of 30.15%. Additionally, analysts are showing confidence in buying this stock thus marking it as “Strong Buy.”
By the way, you can look into our other such in-depth analysis of Chevron, Square stock, Tesla stock, and many more!
A Look Back into NVIDIA & Its Evolution
NVIDIA is popularly known for the production of powerful graphics processing units (GPU) and was founded in 1993.
On January 22, 1999, the business went public under the ticker NVDA, making its debut in the stock market. That same year, NVIDIA debuted the GeForce 256, the world’s first GPU, solidifying the company’s position as a market leader in graphics processing units.
NVIDIA introduced CUDA (Compute Unified Device Architecture) in 2006, which allowed GPUs to be used for more than just gaming. This innovation created fresh growth opportunities and attracted investors’ interest. In 2012, NVIDIA introduced the Tegra line of mobile processors, broadening its product portfolio and acquiring a larger market share.
With the rise of AI and deep learning in 2016, NVIDIA GPUs become vital for these applications. The introduction of the Pascal GPU architecture and the DGX-1 system strengthened NVIDIA’s dominance in developing technologies, resulting in a stock price rise. In 2018, NVIDIA announced the $6.9 billion acquisition of Mellanox Technologies, expanding its area of operations in data centers and high-performance computing.
NVIDIA achieved record revenues in 2020 because of its strong success in the gaming, data center, and professional visualization categories. The same year, IBM revealed its intention to acquire ARM Holdings for $40 billion, with the goal of diversifying and strategically strengthening its market position. NVIDIA completed a 4-for-1 stock split in July 2021, making its shares more accessible to regular investors while also increasing liquidity and possible price appreciation.
By 2023, NVIDIA had maintained its position as a market innovator and leader in AI, gaming, and data center technologies.
Investment Strategy for NVIDIA Stock by Fintechzoom
The company’s chips are important for AI applications, and NVIDIA controls approximately 90% of the AI chip industry. Their supremacy is supported by a first-mover advantage and strategic acquisitions like Mellanox, which improve their data center capabilities. In 2023, NVIDIA’s stock value increased by 240% due to increasing demand for AI technology. From the reports of Nasdaq.com, Net income increased from $680 million in Q3 2022 to $9.2 billion in Q3 2023.
Diversification and Risk Management: NVIDIA has high growth potential but also faces volatility and concentration issues. The stock has a high beta of 1.73, indicating more volatility than the market. Furthermore, geopolitical variables such as trade disputes between the United States and China have an impact on NVIDIA’s ability to sell its latest processors in China, which can reduce revenue. To mitigate these risks, you can consider diversifying your portfolio.
NVIDIA’s growth is projected to be driven by the expanding AI sector. However, competition from businesses such as AMD, Intel, and other tech organizations creating their own AI chips may affect market share.
NVIDIA’s ability to overcome export limitations by developing GPUs for the Chinese market demonstrates its resilience to regulatory obstacles. Do keep such small moves of the company to understand the nature of its operations.
For stocks with high volatility and potential for short-term swings, an incremental investment technique may be beneficial. Investing in small, regular increments can reduce the impact of market volatility while also providing opportunities to profit from stock price declines.
Considering all the points if you are considering investing with a safer strategy, you can consider investing in S&P 500 to mitigate the risk. These funds, including NVIDIA, provide diverse exposure to the stock’s performance as part of a larger market portfolio.
Track NVIDIA Stock Fintechzoom Live Here
Bottom Line
Well, many analysts have already suggested a “strong buy” for this stock. However, if you are still not sure about investing you can consider diversifying your portfolio with other tech giants. Also, the S&P 500, as highlighted in the above paragraph is another good strategy that you can consider before making your investment in NVIDIA stock fintechzoom.
FAQs
Q1. How has NVIDIA stock performed in the past year?
Between August 2023 and August 2024, NVIDIA’s stock price increased by approximately 150%. The stock reached a 52-week high of $140.76 and a low of $39.23.
Q2. What are the key events in NVIDIA’s history that have influenced its stock performance?
- 1993: NVIDIA was founded.
- 1999: Went public and launched the GeForce 256, the world’s first GPU.
- 2006: Introduced CUDA, allowing GPUs to be used for general computing tasks.
- 2012: Launched the Tegra line of processors for mobile devices.
- 2016: Launched the Pascal GPU architecture and the DGX-1 system, crucial for AI applications.
- 2018: Acquired Mellanox Technologies for $6.9 billion.
- 2020: Achieved record revenues and announced the acquisition of ARM Holdings.
- 2021: Executed a 4-for-1 stock split.
Q3. Why is NVIDIA a strong investment choice for the future?
NVIDIA’s dominance in the AI chip market, holding around 90% of the share, positions it well for continued growth.
Q4. What are the main risks associated with investing in NVIDIA stock?
Investing in NVIDIA stock comes with risks due to its high volatility (beta of 1.73) and concentration in AI and semiconductor markets. Geopolitical factors, such as U.S.-China trade tensions, can impact NVIDIA’s ability to sell its products in China, affecting revenue.
Q5. What investment strategies are recommended for NVIDIA stock?
- Diversification: Consider diversifying your portfolio with other tech stocks or investing in index funds like the S&P 500 to mitigate risk.
- Incremental Investment: Invest in small, regular increments to reduce the impact of market volatility and take advantage of price dips.
- Monitoring Trends: Keep track of technological advancements, market trends, and competitor actions to make informed investment decisions.
Q6. What do analysts say about NVIDIA stock?
Analysts have shown strong confidence in NVIDIA, with many rating it as a “Strong Buy.” The stock is projected to have an upside of 30.15%, reflecting positive sentiment and growth potential.
Q7. How does NVIDIA’s new AI chip development impact its stock?
NVIDIA’s development of new AI chips, particularly useful for generative AI applications, has garnered significant attention. As generative AI continues to trend, NVIDIA’s advancements in this area are expected to drive further demand and positively impact its stock performance.
Q8. How do external factors influence NVIDIA’s stock performance?
External factors such as global tech trends, economic indicators, regulatory shifts, and geopolitical events play a critical role in shaping NVIDIA’s stock performance. For instance, changes in consumer behavior and trade policies can impact market dynamics and affect stock value.
Q9. What are some notable achievements of NVIDIA in recent years?
In recent years, NVIDIA has achieved several milestones, including the launch of groundbreaking products like the Pascal GPU architecture, strategic acquisitions like Mellanox Technologies, and record financial performances with significant revenue growth.