Having reported strong quarterly results, Nvidia (NASDAQ:NVDA) stock has gained some ground after the massive dip earlier in the year.
Tech stocks are up and gaining this week but the results gave a much-needed push to NVDA stock. It’s been trading between $185 and $190 this week and it still looks cheap to me.
The tech giant has massive potential and if you can ignore the short-term hurdles, the bigger picture looks promising. NVDA stock looks fairly valued at the current level.
Despite macroeconomic conditions, the company managed to deliver growth for investors.
I had recommended a buy in my previous coverage of the stock when it was trading at $169, if you had made the move, you could be sitting on gains of more than 10%, but it’s still not too late to own the stock.
The management projection for the second quarter didn’t meet expectations, but no company can be immune to the problems faced by the economy.
Nvidia said the revenue growth should decelerate 25% year over year. I believe the data center will be in focus for the second half of the year and it will drive NVDA tock. It has already managed to start off on a high note in the previous quarters.
A Closer Look at NVDA Stock
The most impressive number in the quarterly results is the 83% year-over-year growth in the data center business, it was up from 71% in the fourth quarter.
Nvidia has already set a gold standard in the gaming sector but it is in the growth stage in the data center segment and there is massive potential.
The biggest driver is the reliance on cloud providers and the rise in the number of data centers being built today.
This is not to say that the business in other segments will drop. I am certain the company will continue to drive growth across various sectors but the data center will be a major contributor and Nvidia will gain an edge in the industry.
It offers complete solutions for the data centers right from the software to the hardware and applications. The industry is booming and this means the company will remain in demand for many years to come.
The Bottom Line
Vivek Arya, a Bank of America analyst considers NVDA stock as a top large-cap semiconductor and is bullish on it. Further, Evercore analyst C.J. Muse also has a buy rating on the stock post the quarterly results with a price target of $300.
I believe NVDA stock could be one of the top tech stocks for the long term. Do not worry about the short-term ups and downs and hold on to the stock. It has the potential to generate returns in the long run.
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.