Nvidia Stock Is a Buy Ahead of Its Q2 Earnings Report

  • Nvidia (NVDA) is enjoying massive growth in the data center segment.
  • There could be a short-term revenue dip but the long-term picture looks attractive for Nvidia.
  • NVDA stock is trading at a discount and is a long-term buy.
NVDA stock - Nvidia Stock Is a Buy Ahead of Its Q2 Earnings Report

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Nvidia (NASDAQ:NVDA) is considered one of the best in the industry, but tech companies have suffered the most recently. Nothing could stop NVDA stock from dropping to a new low. Despite growing at a rapid pace, Nvidia is struggling. The stock was inching closer to the 52-week low of $140, but the recent developments in the tech space gave it a push and it has hit $154 today.

I believe NVDA stock is a great long-term buy and the company will outperform its peers. It will not only be a pioneer in digital transformation, but will also be a leader when it comes to the metaverse and other technologies. With that in mind, let’s dig deeper into my analysis of the stock.

Ticker Company Recent Price
NVDA Nvidia $154.04

Data Center Remains Major Growth Driver

Despite having a presence across multiple industries, Nvidia was best known for gaming and PC hardware over the past few years. However, the company has reported massive growth in the data center segment and it has become a major contributor to the revenue. It is not by accident, but with careful planning and investment, that Nvidia has achieved tremendous success in this area.

In the first quarter, the company reported data center sales of $3.75 billion and gaming sales of $3.62 billion. These two remain the dominant business segments for the company, but it looks like the data center will take over for the next few years. There is massive demand in the industry and if the company manages to deploy its resources well, it will be able to keep pace with the demand.

For this quarter, the company expects $8.1 billion in sales and projects another record quarter in data center sales. If you are looking for one reason to invest in NVDA stock, it will be the potential of the data center. Companies have enormous data and they are looking for ways to extract insight and automate and quicken processes. Nvidia can advantage this increasing demand.

What Wall Street Thinks About Nvidia

Recently several analysts have reduced their price targets on NVDA stock but still maintain their buy ratings.

For example, Piper Sandler analyst Harsh Kumar has a price target of $235 with an overweight rating on the stock. He believes that the company will continue to face online issues in Russia and China in addition to the concerns surrounding crypto. Further, Ivan Feinseth, a Tigress analyst has a price target of $310 with a Buy rating on the stock. The analyst believes that Nvidia holds a leadership position in data centers which will drive growth in addition to autonomous technology and artificial intelligence. Likewise, Citi analyst Atif Malik has a price target of $285 and a buy rating on the stock.

Bottom Line on NVDA Stock

Nvidia is not just another tech company, it is one of the top tech companies in the country and could generate massive revenue in the coming years. A slowdown in a quarter does not speak anything about the fundamentals of the business. Even if the revenue growth in gaming and PCs shows a slowdown, there will be a lot to look forward to. The company has a stellar business model with a solid balance sheet.

At the end of the day, NVDA stock is a steal at the current level because it will go higher in the next few years and might not be a bargain then.

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.

Article printed from InvestorPlace Media, https://investorplace.com/2022/07/nvda-stock-nvidia-is-a-buy-ahead-of-its-q2-earnings-report/.

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