For those investors with the foresight to have owned NVIDIA Corporation (NASDAQ:NVDA) at the beginning of the year, the investment has been nothing short of a home run.
NVDA stock price has posted an incredible 74% gain YTD. That exceeds even the run up in the individual FAANG stocks. It’s been a spectacular year.
As a matter of fact, it’s been a spectacular last couple of years. At the beginning of 2016, the company’s share price was not quite $30. Fast forward to the present, and NVDA stock price today is closing is on the $200 mark. Meanwhile, the dividend has been increased 17% to add a cherry on the already deliciously sweet cake.
And there’s reason to believe that NVDA stock can cross that $200 mark this year.
NVDA’s Growth Is Unstoppable
As shown during the shareholder’s meeting in May of this year, NVDA’s growth across several key metrics has been fueling the bull case for the stock’s rise. FY2017 revenues were up 38% year-over-year, operating margins showed distinct improvement amounting to 1,310 bps, and EPS soared 138%.
Nvidia has been setting internal records and looks in good shape to continue topping its prior performance.
Many of the major trends in tech from self-driving cars to robotics to cloud utilizes its GPU (graphics processing unit) products. In the late nineties, NVDA pioneered the GPU chip that manages graphical output from computers and has now found a catalyst for its products in the visual computing market.
It’s not a matter of gaming, automotive and artificial intelligence at large benefitting from NVDA’s technology so much as it is crucial that companies operating in the above mentioned industries require NVDA’s GPU computing capabilities.
AI is still early stages so NVDA will be growing and innovating alongside frontrunners working on autonomous vehicles (I single out the autonomous vehicle revolution because 145 startups in the space are all on NVIDIA Drive) and other exciting areas impacting the future of tech. AI startup funding has increased by a multiple of 12 over the past five years, and deep learning papers published have increased by a factor of 13 in just the past three years.
Interest and investment in AI has simply exploded and continues to attract top talent. This bodes well for NVDA any way you cut it.
NVDA’s Bright Future
The sky is the limit. Let’s take a look at the Chinese market alone where there has been a focus on automation through robotics technology.
Ecommerce and delivery giant, JD.Com Inc(ADR) (NASDAQ:JD) has selected NVDA for its autonomous machines. From drones to the packaging conveyer belt systems to warehouse logistics machines, NVDA is their partner. This is a perfect example of NVDA’s dominance in it visual graphics computing, which companies need to be on the cutting edge of intelligent machinery.
HIKVISION has also adopted NVDA for its AI City plans. Leveraging NVDA’s AI technology, virtual security, facial recognition, and traffic management lead to a smarter, safer city. There will be over 1 billion cameras worldwide by 2020. In order to make sense of that huge amount of visual data in a positive way for safety and enforcement, NVDA’s products will be necessary.
As we enter a new computing era, as the Company calls it, NVDA is leading the pack.
As of this writing, Luce Emerson did not hold a position in any of the aforementioned securities.
