Nvidia’s Momentum Is Not Going To Slow

The stock market is giving a tough time to several companies. Tech stocks haven’t had a great start to the year due to several reasons driven by the confluence of the macro-level concerns including the high-interest rates and inflation. On top of that, the Russia-Ukraine crisis is doing no good to the industry. Nvidia (NASDAQ:NVDA) recently reported blowout quarter results but NVDA stock is dropping.

The Nvidia (NVDA Stock) logo on a graphics card.
Source: Konstantin Savusia / Shutterstock.com

Despite reporting strong numbers and doubling the profits, the stock did not surge. The stock has gone from $265 to $224 in the past week due to the sell-off. It is hard to understand why investors are selling the stock after the solid quarterly results. However, I see it as a good opportunity to buy the stock for the long term.

Let us dig deeper into my bullish thesis for NVDA stock.

Flawless Quarterly Results

Nvidia reported earnings of $3 billion and a revenue of $7.64 billion in the fourth quarter. The major contributor to the revenue is the data center sales and the company has projected a revenue of $7.94 billion to $8.26 billion for this quarter. There was a time when gaming sales made up for most of the revenue for the company but the data center is taking over now.

Gaming sales increased by 37% year over year to hit $3.4 billion. While the data center sales surged 71% year over year to a record $3.26 billion. The company managed to beat analyst expectations and despite the supply chain issues, it managed to report strong numbers in sales and revenue. While there is no quick fix to the supply chain issues, the company will continue to take the necessary steps to ensure that it does not hamper production and sales.

Analysts Are Bullish on NVDA Stock

Several analysts are bullish on NVDA stock and believe that it will perform in the near term. Hans Mosesmann, a Rosenblatt analyst has a “Buy” rating with a price target of $400 on the stock. The analyst believes that Nvidia is “the best in class AI play”.

Further, Vijay Rakesh, a Mizuho (NYSE:MFG) analyst has a “Buy” rating with a price target of $345 on the stock following the solid results. Piper Sandler (NYSE:PIPR) analyst Harsh Kumar has an “Overweight” rating with a price target of $350. The analyst is impressed with the flawless execution and the strong April guidance. Kumar also believes there are many disruptive catalysts in the company’s portfolio that can help grow the gross margins in the future.

The Bottom Line

Nvidia became the seventh-largest U.S. company by market capitalization and there is a long way to go. In the past year, NVDA stock surged 73% and this is proof that the company has the potential and ability to scale. The current macro issues have affected all companies and industries. It does not reflect the true potential of Nvidia or speak about its fundamentals.

My colleague at InvestorPlace Ian Bezek believes that the stock is a strong sell due to the ARM deal collapse but I do not think so. Nvidia is an individual corporation and its success was never dependent on the deal. The deal collapse may affect the company in the near term but there is nothing to worry about in the long term.

All in all, Nvidia is a solid company with impressive fundamentals and it is going to make big moves in 2022. I have always believed that any dip in NVDA stock is a golden opportunity to add it to your portfolio. Buy NVDA stock and hold for the solid long-term gains.

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.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

Article printed from InvestorPlace Media, https://investorplace.com/2022/02/nvda-stock-nvidias-momentum-is-not-going-to-slow/.

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