#4 - Nvidia (NASDAQ:NVDA)
Nvidia (NASDAQ: NVDA) - The problem: The bubble may be bursting
Investors have been rewarding Nvidia for several years. The stock has increased from $20 per share to nearly $280 per share. The growth wasn’t by accident. The company is a leader in artificial intelligence computing and was been well-positioned as the gaming and crypto markets were expanding along with the need for the graphics cards and components made by Nvidia. However, the pressure is on. With a stock that is now valued at 41x earnings but is projecting its earnings per share (EPS) to grow at less than 20% a year. This means two things. First, they are currently looking overvalued and second, if they have any misses in their earnings report, their stock could take a hit.
So how possible is that? There are two potential issues. The first is in the autonomous car market. The nascent industry has the potential to make Nvidia a big winner. But it also falls into the category of “what could possibly go wrong”? And the answer is, with so much unknown, quite a bit could go wrong. The second issue revolves with data centers. The company’s graphic processing units (GPUs) have become popular as a source of processing power for servers. But Nvidia isn’t the only player in this market, and investors have been pouring money into their major competitor, AMD. There’s probably only room for one of these companies to take the market share that would lead to big profits and if Nvidia comes in second, it could be a hit to their market cap.
About NVIDIA
NVIDIA Corporation provides graphics and compute and networking solutions in the United States, Taiwan, China, Hong Kong, and internationally. The Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU or vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building and operating metaverse and 3D internet applications.
Read More - Current Price
- $116.78
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 38 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $142.10 (21.7% Upside)
