Nvidia Corporation (NASDAQ:NVDA) is the leading high-end graphics card (or as it calls it, visual computing) maker in the world. And when you look at how powerful visualization is in every aspect of our interaction with technology, you understand what a compelling prospect that is.
But it hasn’t been all wine and roses for NVDA. Due to its specific niche, more diversified competitors and a focus on higher-end gaming markets (as well as the global recession), it was not growing as many had hoped.
Disappointment in the markets is usually a heavy price to pay, and NVDA stock has paid it in spades.
But given the fact that its five-year stock performance is up 270%, it’s safe to say that NVDA has been impressing its critics and managing any disappointments with aplomb.
Nvidia’s (NVDA) Wild Card
Aside from its consumer-facing business, the company also is the go-to visual computing contractor for the world’s most advanced research labs. And in recent years it has begun to work with a number of car makers to develop more advanced integrated driving experiences using visual computing technology.
We are on the brink of the next generation of automobiles. Gradually we have seen the introduction of “smart” systems like real-time traffic and mapping functions, entertainment systems, integrated service and performance information, etc. This is just the beginning.
And it doesn’t take into account the autonomous car or semi-autonomous car features (parallel parking, automatic braking) that are becoming commonplace. These sectors are where NVDA can really show off its prowess.
But it doesn’t stop there: Virtual reality and augmented reality are the hottest new trends in gaming (just take a look at Pokemon Go) and they take massive amounts of visual computing to make them as immersive and realistic as possible.
VR is completely immersive; AR gives you the ability to see your couch or dog or co-player while moving around.
According to Venture Beat, VR gaming is seven times more graphic intensive as current non-VR gaming. And it’s not really the VR headsets where Nvidia sees the opportunity, but in the millions of gaming computers that run VR for the headsets.
Facebook Inc (NASDAQ:FB) recently released its Oculus Rift and Sony Corp (ADR) (NYSE:SNE) is launching its PlayStation VR as well. Microsoft Corporation (NASDAQ:MSFT) is also going to launch an AR system later this year, called HoloLens.
All this, and we haven’t even begin to discuss the imminent applications of visual computing in healthcare, Big Data, utilities or “smart” homes … or the massive Internet of Things movement that is underway.
Bottom Line on NVDA Stock
The fact is, it’s no surprise NVDA is up 60% year to date. It continues to post strong numbers and has a diversified customer base that helps it gather revenue from different sources. If the consumer market fades, it has more than just gamers to rely on.
There’s a whole new line of graphic chips out this year that is going to be yet another significant step up the performance ladder. And on its recently released line of graphic cards, it is offering lower-priced models of it higher performance models for the first time.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool,PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
