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Santa Clara, California-based NVIDIA Corporation (NVDA) is a key innovator of computer graphics and AI technology. The company provides graphics and compute and networking solutions. With a market cap of $2.9 trillion, NVDA develops a platform for scientific computing, AI, data science, autonomous vehicles, robotics, metaverse, and 3D internet applications, as well as focuses on PC graphics by serving clients worldwide.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and NVDA fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the semiconductors industry. With specialization in products and platforms for gaming, professional visualization, data centers, and automotive, Nvidia solidifies its position as a pioneer of GPU-accelerated computing.
Despite its notable strengths, Nvidia slipped 15.2% from its 52-week high of $140.76, achieved on Jun. 20. Over the past three months, NVDA stock gained 8%, outperforming the Technology Select Sector SPDR Fund’s (XLK) 5% gains during the same time frame.
Over the longer term, shares of Nvidia rose 141% on a YTD basis and climbed 144.7% over the past 52 weeks, outperforming Technology Select Sector SPDR Fund’s YTD gains of 14.5% and a solid 27% return over the last year.
To confirm the bullish trend, Nvidia has traded above its 200-day moving average over the past year. However, the stock is trading slightly below its 50-day moving average with slight fluctuations recently.
NVDA's strong performance was driven by the high demand for its Hopper and Blackwell chips. The company's growth in the AI sector is impressive, and Philippe Laffont’s legendary hedge fund Coatue Management's significant investment indicates confidence in future growth potential. With a major shift from CPUs to GPUs in data centers, Nvidia is well-positioned for continued success in the market.
On Aug. 28, NVDA shares closed down more than 1% after reporting its Q2 earnings results. Its revenue was $30 billion, surpassing analyst estimates of $28.8 billion. The company’s adjusted EPS of $0.68 exceeded analyst estimates of $0.64. For fiscal Q3, NVDA expects revenue to be $32.5 billion.
Nvidia’s rival, Advanced Micro Devices, Inc. (AMD), lagged behind NVDA stock, with a marginal uptick on a YTD basis and a 40.3% gain over the past 52 weeks.
Wall Street analysts are highly bullish on Nvidia’s prospects. The stock has a consensus “Strong Buy” rating from the 39 analysts covering it, and the mean price target of $144.75 suggests a potential upside of 21.3% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
