4 Things to Keep in Mind About Nvidia Stock After Earnings Miss - Nasdaq

The year has been full of ups and downs for Nvidia (NASDAQ:), and that’s been reflected in the Nvidia stock price.

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Investors were hoping to learn some good news last week when . Unfortunately, they didn’t get it.

Nvidia’s earnings and revenue did beat Wall Street forecasts, but its revenue is still down 5% from a year earlier.

This is the fourth consecutive quarter the company has seen its revenue decline. The company’s gaming business, which is its largest business segment, saw its revenue fall by 6% year over year. To top it all off, the company’s fourth-quarter guidance fell short of analyst’s expectations as well.

However, it’s not all bad news for Nvidia stock. This week, the company’s shares hit a new 52-week high after it was upgraded by several analysts. Going forward, here are four things you should know about NVDA stock.

1. Gaming Business Rebound

Nvidia’s gaming business has taken a hit in sales over the past couple of years. This is a problem, given that its gaming business is also the company’s main revenue driver. But analysts have grown increasingly optimistic that this business segment is starting to rebound.

The company’s gaming revenue is down by 6%, but it’s up 26% from the previous quarter. And Nvidia has seen strong consumer demand for its desktop and notebook gaming.

2. Wall Street Optimism

Investors were disappointed by the latest earnings report, but the overwhelming response from Wall Street is that the company is a buy. 30 analysts are currently reviewing the stock, and only two recommend selling.

Analysts from Cowen, Wells Fargo, and Evercore ISI all raised their price targets on Nvidia stock. Overall, a moderate buy with a potential upside of more than 8%.

3. Revenue Improvements

Nvidia’s revenue is down slightly from a year earlier, but it continues to improve every quarter. Analysts were only expecting the company to bring in $2.91 billion in revenue, and instead, the company brought in $3.01 billion. And if the company can meet its fourth-quarter guidance, its revenue will have grown 31% year over year.

4. AI and Nvidia Stock

Going forward, one of the biggest growth drivers for Nvidia stock will be the increasing reliance on artificial intelligence (AI). In particular, many companies want to begin utilizing machine learning.

Machine learning is a division of AI that allows computers to learn without being programmed to do so. Nvidia’s graphics processing units (GPUs) provide the power necessary to support this kind of technology.

For instance, Nvidia recently signed a partnership with the U.S. Postal Service. The agency plans to use Nvidia’s technology to speed up its package processing. As more companies turn to AI, this could lead to massive growth for the company.

As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities.

The post appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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