Nvidia Will Crush Its Fourth Quarter Earnings So Buy NVDA Stock

Tech stocks are recovering and showing strong signs of a rebound. With several stocks down since the start of the year, now is a great chance to add them to your portfolio. Nvidia (NASDAQ:NVDA) is a hot tech company that is only growing with each passing year.

A racecar featuring Drive PX 2 technology from Nvidia (NVDA) parked.
Source: Steve Lagreca / Shutterstock.com

Call it data center gains or the massive growth in the gaming segment, there is no stopping the momentum of the company. NVDA stock was trading close to $150 last year and is trading at $243 today.

The stock went as high as $333 in November and has shown volatility since then. However, I believe the stock has massive growth potential and it is a good addition to your portfolio.

What To Expect In Fourth Quarter Results

In the third quarter, the company reported record revenue of $3.22 billion from the gaming business, which was a 5% increase from the previous quarter and 42% higher than the same period a year ago. It also saw a massive rise in revenue from data centers, which was up 55% year over year.

As the company gears up to report the fourth-quarter results on Feb. 16, there is ample optimism among investors. Nvidia has already beaten the analyst expectations for the past six consecutive quarters. It expects revenue of $7.40 billion and an EPS of $1.22. I believe the company will be able to meet its projections and could impress investors with more details about the Omniverse.

However, there is news that Nvidia is planning to abandon the acquisition of Arm. But this shouldn’t affect the fundamentals of the company or the potential of NVDA stock. It is one tech stock that can outpace the S&P 500 and could reap strong returns for investors.

Gaming and data center are the top two revenue-generating segments for Nvidia but it doesn’t stop there. The company also has a presence across several industries and segments. It has massive growth potential in the automotive segment and the industry is hot today.

Do not worry about the Arm deal or the cryptocurrency mining segment. Even if the company only focuses on the top two segments, it will be able to generate significant revenue.

Nvidia still has a lot of potential to expand and attract new users. NVDA stock is proof that the company is on the right track and will continue to grow in the coming years.

The Bottom Line On NVDA Stock

New Street analyst Pierre Farrago has a “neutral” rating on the stock with a target price of $250. The analyst is of the opinion that because Ethereum (CCC:ETH-USD) is down more than 40% from its peaks, mining volumes will decline in the coming 6 months and the crypto demand for GPUs will drop accordingly. This could lead to a dip in the excess shipments and thus affect the inventory.

The analyst adds that Nvidia might anticipate the situation and reduce the shipments to avoid piling up inventory. This situation could lead to a pullback in shares and it could be a perfect opportunity to buy the dip.

However, I do not think NVDA stock will go as low as $150 anytime soon, and if the company reports strong quarterly results, the stock is going to soar. Now is the right time to make an addition to your portfolio.

Nvidia is a company that never fails to impress investors and it is a solid long-term buy. There is ample growth potential and an opportunity to make the most of the thriving automotive industry across the world.

With a solid lineup of products, there is no stopping the growth momentum of Nvidia. Buy NVDA stock before the results to make the most of the rise.

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/nvidia-will-crush-its-fourth-quarter-earnings-so-buy-nvda-stock/.

©2022 InvestorPlace Media, LLC