#5 - Nvidia (NASDAQ:NVDA)
The bullish case for Nvidia (NASDAQ:NVDA) is that graphic processing units (GPUs) are about to get put to use in exciting new ways. As 5G technology becomes a standard, we should see advances in artificial intelligence, robotics, and autonomous vehicles, not to mention 5G mobile networks.
But the development of a 5G infrastructure was already lagging behind before the Covid-19 pandemic. However, NVDA stock has got another catalyst, gaming. 2020 was the year when many companies were bringing new gaming consoles to the market.
Although that may not happen until later this year, a lot of people are stuck at home. That is increasing demand, which I imagine will only increase as consumers receive their stimulus funds. This should create a catalyst for Nvidia who recently announced that their next generation chips are in over 100 new laptops. Not only can they handle the most demanding games, but they include features that make them ideal for those that find themselves working from home.
And Nvidia also had a strong balance sheet heading into the pandemic. At the end of last year, the company was posting an adjusted profit margin of 34% and net cash and equivalents was $8.9 billion.
There are reasons to be cautious. Recently, Bank of America analyst Vivek Arya reiterated his buy rating for NVDA stock and gave it a price target of $300.At the time that would have been an increase of more than 15%. But with the stock currently trading at around $295, there may be some question if the rally is over. Second, semiconductor stocks tend to be very cyclical. But for the rest of 2020 at least, NVDA looks like a solid stock to own.
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
- $139.99
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 40 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $164.63 (17.6% Upside)
