2 Catalysts That Will Drive Nvidia Stock Higher

As Nvidia (NASDAQ:NVDA) finally completes the much-awaited stock split, the leader in the semiconductor industry has a lot working in its favor. If you missed out on the opportunity to buy NVDA stock and enjoy the 4-for-1 stock split, you can still invest in the company. When it comes to fundamentals, Nvidia is one of the best. It is the gold standard in GPU processing and has become a leader in the AI industry. 

An Nvidia (NVDA) semiconductor chip on a black background.
Source: Hairem / Shutterstock.com

I have always been bullish on NVDA stock and had recommended a purchase before the stock split. The stock has enjoyed an excellent ride over the years.

It has gone from $104 in April 2017 to $500 in October 2020 and is exchanging hands for $755 today. If you had made the purchase based on my June 9 recommendation at $700, you would be sitting on a chance to get four times shares. 

The stock is up 95% over the last year and 40% over the past six months. Looking at the strong position Nvidia holds in the industry, there is no stopping NVDA stock. Investors should be ready for massive gains in the coming years. With that in mind, let’s take a look at 2 catalysts driving NVDA stock higher.

ARM Acquisition

Nvidia had announced the acquisition of ARM for $40 billion in 2020. The deal has not been received positively in the semiconductor industry but if it goes through, Nvidia has an opportunity to become one of the most important companies with time. It needs approval from the U.K., U.S., European and Chinese regulators. 

This deal will allow Nvidia to advance in the field of computing and it will take the sales and revenue higher. The deal will be complete by March 2022 and once it does, there is no looking back for Nvidia. The company will be able to offer higher efficiency on its products with ARM architecture.

At a recent conference of Six-Five Summit and CogX, Nvidia CEO Jensen Huang made a case for the merger which would combine the capacities of ARM with Nvidia’s AI capabilities and will lead to the creation of new ideas. The deal will open new business opportunities for Nvidia and will help the company create new products that will only increase its competitive advantage in the industry. 

Another step ahead with AI

Nvidia is not new to AI and it is only moving forward with it. The company unveiled Nvidia AI LaunchPad, which is a program for enterprises and it will give access to NVIDIA-powered software and infrastructure to streamline the AI lifecycle.

Equinix, a leader in digital infrastructure will be the first in the program and it will provide Nvidia-powered solutions on its platform. Nvidia is making it easy for enterprises to get access to AI and deploy it for the growth of their business. 

I strongly believe that AI will take Nvidia higher in the coming months and with each development and update, the company is only making its presence stronger in the industry. 

The bottom line on NVDA stock 

Once the ARM acquisition is complete, Nvidia could become one of the biggest tech companies today. However, the acquisition may take time but there is no doubting the potential of Nvidia.

The company has strong fundamentals and enjoys a top position in the industry. There could be a dip in NVDA stock due to the stock split but it proves nothing about the fundamentals.

Raymond James analyst Chris Caso raised the price target of NVDA stock to $900 with a Strong Buy rating. The analyst believes that the company is best positioned for growth in the long term. 

There is not one but many factors that will take NVDA stock higher and every dip is an opportunity to load up on the stock. 

NVDA stock is poised for long-term growth and is one stock to hold for the decade. 

On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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