This one certainly has long-term potential.The simple reason is that Nvidia is likely to show huge growth in its powerful free cash flow (FCF) and its FCF margins. It will lead to a rise in EPS and will take NVDA stock to new highs. ARM currently supplies technology to the majority of NVIDIA’s competitors. The acquisition of ARM from Softbank for $40 billion will increase its hold on the semiconductor industry. There is no doubt that the company is doing very well. Out of 27 analysts on Tipranks, 23 have a buy rating and 4 have a hold rating with a price target of $649. She cited the strong growth opportunity in the data center which could cross $50 billion. Bernstein analyst Stacy Rasgon has an “outperform” rating with a price target of $625. Wall Street is also bullish on the stock. The growing demand for chips from Sony (NYSE: SNE) and Microsoft (NASDAQ: MSFT) put the stock in a strong position in the industry. The company has a technical edge which sets it apart from its competitors. Despite the company’s GPUs being in short supply, the company has made $5 billion in Q4 and it can do so again. The coming quarters will reflect strong demand for its GPUs, and the revenue from the gaming segment is expected to grow significantly. The company’s GPUs offers the best gaming experience with top-quality graphics. With a boom in the gaming industry, there will be stellar growth in the demand for GPUs and it will place Nvidia in a strong position in the industry. It is not possible to talk about gaming without including Nvidia. According to Mordor Intelligence, the gaming GPU market will grow at 14.1% CAGR from 2021 to 2026. It is a safe stock with a dividend payout. With an increase in revenue, NVDA stock will see an upside and so will the dividend. It also pays a dividend and has a yield of 0.12%. With a surge in demand for its graphic cards, it is possible that the company will cross $5 billion in revenue. Revenue of $5.3 billion is forecasted for the current quarter, which would show a 72% growth from the same period the previous year.
It is expected that the company will continue growing revenue in the coming year. NVDA is the largest chipmaker in the U.S.
The company has benefited from work from home and has made a strong mark in the gaming industry. The adjusted EPS stood at $3.10, surpassing analyst expectations. The sales increased by 61% in the quarter and the data center revenue increased by a whopping 97% from the previous year. Stellar Fourth Quarter Resultsĭespite the pandemic, NVDA had a great fourth quarter in terms of revenue and growth. NVDA stock is going to be in demand throughout 2021 and it will generate big returns for investors. I am bullish on the stock for its strong growth prospects and impressive fundamentals. NVDA stock has gained 136% in the last 12 months and it is currently changing hands at $513.
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