Nvidia (NASDAQ: NVDA) finds itself perched on the precipice of monumental change. With a market cap of $3.3 trillion, trailing just $150 billion behind tech behemoth Apple, Nvidia isn’t merely chasing the crown – it’s poised to own it.
Having already tasted the sweet nectar of the top spot, Nvidia’s latest ascent feels distinct. A permanence seems to loom on the horizon, a possibility that has investors buzzing with excitement as they ponder the company’s trajectory over the upcoming year.
Image source: Getty Images.
Rising Demand for Nvidia’s Innovations
Nvidia’s stock meteoric rise of 1,000% in the past two years can be attributed to one simple phenomenon – the explosion of artificial intelligence (AI).
The surge in demand for AI-driven applications has taken the world by storm, but not Nvidia. Years of strategic preparation have culminated in Nvidia emerging as a frontrunner in the AI revolution, reaping rich rewards in the process.
With its top-notch graphics processing units (GPUs) acting as the cornerstone of leading AI tools worldwide, Nvidia’s future shines brightly. Moreover, the company’s forward-looking approach is evident in the development of cutting-edge GPUs destined to power the next wave of AI-driven innovation. The Blackwell GPUs, already in production, are set to hit the market in the fourth quarter, commanding hefty price tags of up to $40,000 and holding the title of the most coveted technology globally. As Nvidia CEO Jensen Huang aptly put it, “Everyone wants to have the most [Blackwell GPUs], and everybody wants to be the first.”
Sustainable Growth and Unwavering Fundamentals
Bolstered by the insatiable appetite for its GPUs, Nvidia’s fundamental metrics continue to gain strength. The numbers speak volumes: In 2022, the company’s annual revenue stood at $27 billion. Fast forward to the present, and Nvidia boasts a staggering $96 billion in revenue over the past 12 months – a fourfold increase from 2022. Analysts foresee a further surge to $178 billion by 2026.
Such exponential growth is the primary driver propelling Nvidia’s stock to stratospheric heights. Notably, the company’s profits are outpacing its revenue growth, with net income soaring from $4.4 billion in 2022 to an eye-watering $53 billion over the previous 12 months – a phenomenal jump of 1,200%.
Forecasting Nvidia’s Trajectory
Predicting Nvidia’s stock trajectory is akin to navigating uncharted waters, given the extraordinary pace of its revenue and earnings expansion. Meeting or exceeding expectations could catapult the stock to new dizzying heights, while falling short might precipitate a sharp decline.
Despite the short-term flux, long-term investors would do well to look beyond the immediate market gyrations. At its core, Nvidia stands as the go-to choice for developers spearheading humanity through its current technological renaissance. Though volatility may punctuate the journey, Nvidia’s unwavering presence in the AI revolution cements its status as a stalwart long-term investment. As we stand on the cusp of history, Nvidia’s imminent ascension to the zenith of corporate supremacy seems all but assured.
Seizing a Golden Opportunity
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*Stock Advisor returns as of October 14, 2024
