Nvidia Stock Is a Buy on Weakness

NVDA stock - Nvidia Stock Is a Buy on Weakness

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Tech giant Nvidia (NASDAQ:NVDA) is set to report quarterly earnings on May 25 and the stock certainly hasn’t had a smooth ride this year. NVDA stock was once trading at the highs of $346 last year but has consistently dropped since the beginning of 2022. The stock is down more than 40% over the past six months and 24% in the past month. However, NVDA stock is not the one you should write off too soon. This weakness is a solid chance to buy before the company announces results.

The overall market sentiments are unfavorable with the high inflation and interest rates but Nvidia can be a solid long-term investment. NVDA stock might test your patience in the near term but it is the one to own and hold for the long term. Rival Advanced Micro Devices (NASDAQ:AMD) results led to increased optimism about the industry and NVDA stock’s upcoming results. AMD’s solid report card gives a reason to believe that Nvidia will also show robust growth this quarter. AMD reported solid growth in gaming and Nvidia is a leading supplier in the market which means there is a lot to look forward to. Analysts expect the company to report revenue of $8.12 billion, which would be in line with the projection. 

The management has projected robust growth for the year and is aiming at a revenue of $8.1 billion for the first quarter, which is a 43% rise year-over-year (YOY). Nvidia’s business is spread across different industries which ensures that the company makes the most of the growing demand in cloud computing, gaming and data centers. The company has set a gold standard in chips used by gamers and I believe it will continue to expand this segment. It already enjoys an industry-leading position and is trading at a discount today.

I recommend a buy-and-hold. Notably, the stock is trading well above its peers and the market so you can expect short-term volatility but it also means you can continue to add up in the weakness. 

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.


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