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For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly 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 $16.68 billion in fiscal 2021, up approximately 53% from fiscal 2020.
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 61% and 39% of second-quarter fiscal 2022 adjusted revenues, respectively.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Nvidia ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in June 2011 would be worth $47,171.78, or a 4,617.18% gain, as of June 21, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 227.68% and the price of gold went up 9.40% over the same time frame.
Going forward, analysts are expecting more upside for NVDA.
NVIDIA is benefiting from the coronavirus-induced work-from-home and learn-at-home wave. It is also benefiting from strong growth in GeForce desktop and notebook GPUs, which is boosting gaming revenues. Moreover, a surge in Hyperscale demand remains a tailwind for the company’s Data Center business. Expansion of NVIDIA GeForce NOW is expected to drive user base. Further, solid uptake of artificial intelligence-based smart cockpit infotainment solutions is a boon. Additionally, collaboration with Daimler-owned Mercedes-Benz is expected to further strengthen NVIDIA’s presence in the autonomous vehicles and other automotive electronics space. The stock has outperformed industry over the past year. However, management expects COVID-19 pandemic to negatively impact near-term revenues. Moreover, the U.S.-China trade war remains a key concern.
Over the past four weeks, shares have rallied 24.33%, and there have been 13 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
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