How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Nvidia (NVDA) ten years ago? It may not have been easy to hold on to NVDA for all that time, but if you did, how much would your investment be worth today?
Nvidia's Business In-Depth
With that in mind, let's take a look at Nvidia's main business drivers.
NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence (AI) based solutions that now support high performance computing (HPC), gaming and virtual reality (VR) platforms.
NVIDIA’s GPU success can be attributed to its parallel processing capabilities supported by thousands of computing cores, which are necessary to run deep learning algorithms. The company’s GPU platforms are playing a major role in developing multi-billion-dollar end-markets like robotics and self-driving vehicles.
NVIDIA is a dominant name in the Data Center, professional visualization and gaming markets where Intel and Advanced Micro Devices are playing a catch-up role. The company’s partnership with almost all major cloud service providers (CSPs) and server vendors is a key catalyst.
NVIDIA’s GPUs are also getting rapid adoption in diverse fields ranging from radiology to precision agriculture. The company’s GPUs power the top two supercomputers in the world, located at Oak Ridge and Lawrence Livermore National Laboratories in the United States, as well as the top supercomputers in Europe and Japan. In all, NVIDIA powers 136 of the TOP500 supercomputers.
Santa Clara, CA-based, NVIDIA reported revenues of $26.97 billion in fiscal 2023, slightly up from $26.91 billion in fiscal 2022.
Beginning first-quarter fiscal 2021, NVIDIA started reporting revenues under two segments – Graphics and Compute & Networking.
Graphics includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro GPUs for enterprise design; GRID software for cloud-based visual and virtual computing; and automotive platforms for infotainment systems.
Compute & Networking comprises Data Center platforms and systems for AI, HPC, and accelerated computing; DRIVE for autonomous vehicles; and Jetson for robotics and other embedded platforms. Mellanox revenues included in this segment beginning second-quarter fiscal 2021.
Graphics and Compute & Networking accounted for 44% and 56% of fiscal 2023 revenues, respectively.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Nvidia a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2013 would be worth $106,640.45, or a 10,564.05% gain, as of June 9, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 161.29% and the price of gold increased 36.95% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for NVDA.
NVIDIA is gaining from strong growth of artificial intelligence, high-performance computing and accelerated computing, which is boosting its Compute & Networking revenues. A surge in Hyperscale demand and a solid uptake of artificial intelligence-based smart cockpit infotainment solutions are acting as tailwinds. Collaboration with Mercedes-Benz and Audi is likely to advance its presence in autonomous vehicles and other automotive electronics space. Shares of the company have outperformed the industry over the past year. However, NVDA’s near-term prospects look gloomy due to weakening demand for chips used in gaming and professional visualization end markets. While macroeconomic headwinds are impacting gaming and professional visualization chip demand, higher channel inventory levels are hurting chip prices.
The stock has jumped 34.75% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 15 higher, for fiscal 2023; the consensus estimate has moved up as well.
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