We’ve all got some extra time on our hands these days thanks to social distancing, but that may not be so bad for people who enjoy playing video games. That said, NVIDIA (NASDAQ:NVDA) has a new breakthrough for gamers that should spur NVDA stock.
NVIDIA, the California-based chipmaker that specializes in gaming technology, recently announced it launched notebook versions of its GeForce RTX 2080 Super and RTX 2070 Super graphic processing units (GPUs).
The company also says PC manufacturers are making more than 100 new laptop models feature in GeForce GPUs.
The RTX 2080 Super and RTX 2070 are Nvidia’s best and most expensive cards for gaming laptops. The company is also upgrading its RTX 2060 Super, including a 2G GDDR6 VRAM increase over the RTX 2060 for only $50 more.
And there’s more, according to Cnet:
“Nvidia also announced an updated version of its Max-Q power-saving architecture — versions of its GPUs designed for thin-and-light high-end gaming laptops. The big news is a series of changes to its Optimus design, dubbed Advanced Optimus. That controls when a laptop switches between its basic integrated graphics and a high-power, battery-killing discrete Nvidia graphics card. The switching in Advanced Optimus is said to be more efficient. Another new feature, Dynamic boost, offers more granular balancing of power allocation (and thus speed) between the CPU and GPU.”
For gamers, that’s a big deal. Online gaming numbers were up big in March as events were cancelled and people were forced to stay home. And now with more than 90% of the U.S. under stay-at-home orders and all but essential businesses closed, those numbers are only going higher.
And that’s great news for NVDA stock.
NVDA Stock at a Glance
NVIDIA is having a great year compared to the greater market. NVDA stock is up 12% year-to-date, compared to the Nasdaq Composite’s 11% loss.
And there’s no doubt that NVDA has room to run. The stock was around $315 in mid-February before the coronavirus-related selloff that impacted the entire market.
Moreover, Needham analyst Rajvindra Gill has NVDA stock as an “Outperform” and a $270 price target, while Susquehanna analyst Christopher Rolland recently raised his price target from $320 to $330. That would represent about 25% upside.
Fourth-quarter earnings also had NVDA’s revenue at $3.11 billion — a 41% increase from the previous year — and earnings at $1.89 per share. NVIDIA had better-than-expected AI revenue growth, as well as solid growth from its gaming business.
Its forecast for the first quarter is revenue of $3 billion, plus or minus 2%, which slightly beats analysts’ expectations of $2.98 billion.
Reasons to Like NVDA Stock
I’ve been bullish on NVIDIA for a while. About half of NVDA’s revenue comes from the gaming industry, and that industry is growing by leaps and bounds. Video games generated about $152 billion in 2019, and that number is growing by about 10% a year.
That’s 152 billion reasons to like NVDA stock right there.
But then you look at the other applications for GPUs, including cryptocurrency mining and machine learning. Machine learning is where artificial intelligence (IA) starts, bringing our society ever closer to products like autonomous vehicles.
NVIDIA is also involved in the growing deployment of 5G technology. 5G technology makes wireless internet as smooth and responsive as being hooked to a modem. It will make smartphone and other “smart” household devices faster and smarter.
That’s groundbreaking technology that is going to drive society and the stock market in the decade to come. NVDA stock helps put investors in a great position to cash in on 5G technology.
NVDA stock has an A-ranking in my Portfolio Grader, and it’s one of my top Growth Investor recommendations.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.