Here are a few potential reasons why someone might consider buying Nvidia (NVDA) shares:Here are a few potential reasons why someone might consider buying Nvidia (NVDA) shares:
1. Excellent long-term opportunities in focused segments – The firm specialises in GPUs and AI/ML solutions, and Nvidia is among the market leaders in these segments. These are high growth areas that are behind things like gaming, data centres, self-driving cars, etc., and sustaining growth in these areas could lead to more revenues and margins.
2. Superiority in gaming GPUs – Nvidia owns 70%-80% of the discrete GPU market, which includes gaming PCs, data centers, crypto mining, and others; In computers, the market is growing fast and has good growth prospects, which allows it to generate strong profits and cash flows. More demand for GPUs could actually help the stock since everybody is always in search of quick solutions.
3. New product development capabilities – Nvidia has a strong R&D commitment through which it aims at coming up with new products which it can use to seize new trends that are present in areas such as AI, cloud gaming, blockchain, the metaverse, autonomous driving, and others. First mover advantage in new tech might well be the answer to the firm enjoying competitive advantage.
4. Healthy valuation measures – high operating and net profit margins, high price to sales and ev to ebitda ratios, and low debt to equity ratios. Paid lots of capital to shareholders through dividends and share repurchases. There can be good fundamental standards that may attract investors.
5. Affordable prices even though it has been ramped up – This is especially so given that its stock price has surged in the past few years yet it remains fairly valued given the kind of growth company it is. Thus, some might still find upside in above-average growth that exceeds expectations.
0 Comments