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Nvidia (NVDA - Free Report) shares have been on a blazing run for the better part of five years to help it crush the tech sector, its semiconductor industry, and many other high-flyers. The GPU giant has also been on a tear in 2020 and a recent cool down might set up a better buying opportunity for NVDA as we head into 2021.
Nvidia is set to benefit from its continued importance within the global video gaming industry that’s projected to expand from $160 billion in 2020 to over $200 billion by 2023. For example, NVDA’s gaming unit sales climbed 37% in Q3 to account for roughly 50% of the company’s total revenue.
The GPU powerhouse has also gained traction within the cryptocurrency mining space in recent years. Yet, Wall Street and investors seem most pleased with Nvidia’s expansion into and growth within data centers and cloud computing.
NVDA posted blowout third quarter results in November, with data center sales up 162% to help lift its overall revenue by 57%. “The new Nvidia GeForce RTX GPU provides our largest-ever generational leap and demand is overwhelming. Nvidia RTX has made ray tracing the new standard in gaming… Our A100 compute platform is ramping fast, with the top cloud companies deploying it globally,” chief executive Jensen Huang said in prepared remarks.
“We swept the industry AI inference benchmark, and our customers are moving some of the world’s most popular AI services into production, powered by NVIDIA technology.”
Let’s also remember that NVDA made waves in September when it announced its acquisition of Arm Limited from Softbank (SFTBY - Free Report) for $40 billion, most of which will be paid in stock. Arm is one of the most important behind-the-scenes companies in the market and it could be a potential game-changer for Nvidia and the industry.
Yet even if NVDA’s Arm deal doesn’t make it through the various regulatory approval processes in the U.S., China, and the U.K., which could prove difficult and time-consuming, the company’s outlook remains strong. Zacks estimates call for its sales to surge 55% in the fourth quarter and 46% in Q1 FY22, with its adjusted earnings projected to climb by 48% and 40%, respectively.
More broadly, NVDA’s adjusted full-year FY21 EPS figure is expected to soar 68% to reach $9.71 a share on 51% higher revenue that would see it hit $16.5 billion. Nvidia is then projected to follow up this growth with 19% stronger earnings in FY22 and 20% higher sales.
Nvidia’s strong bottom-line revisions help it earn a Zacks Rank #1 (Strong Buy) right now. Investors should also note that 19 of the 26 brokerage recommendations Zacks has for Nvidia come in at a “Strong Buy,” with three more at a “Buy.” This helps showcase how high Wall Street analysts are on Nvidia.
As we mentioned at the top, Nvidia shares have been on an impressive run for five years, up 1,500%. This climb includes a 320% jump in the past two years to crush Apple’s (AAPL - Free Report) 250%, Amazon’s (AMZN - Free Report) 150%, and its industry’s 110% average. And the company even pays a dividend.
The nearby chart shows that NVDA has been taking a bit of a breather. The stock has hovered right near its 50-day moving average for the last two months and it closed regular trading Monday at $533, which put it about 10% off its early November records. This might set up a better buying opportunity for Nvidia, especially for those with a longer-term horizon.
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The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Is Nvidia (NVDA) Stock a Strong Buy for 2021?
Nvidia (NVDA - Free Report) shares have been on a blazing run for the better part of five years to help it crush the tech sector, its semiconductor industry, and many other high-flyers. The GPU giant has also been on a tear in 2020 and a recent cool down might set up a better buying opportunity for NVDA as we head into 2021.
Nvidia is set to benefit from its continued importance within the global video gaming industry that’s projected to expand from $160 billion in 2020 to over $200 billion by 2023. For example, NVDA’s gaming unit sales climbed 37% in Q3 to account for roughly 50% of the company’s total revenue.
The GPU powerhouse has also gained traction within the cryptocurrency mining space in recent years. Yet, Wall Street and investors seem most pleased with Nvidia’s expansion into and growth within data centers and cloud computing.
NVDA posted blowout third quarter results in November, with data center sales up 162% to help lift its overall revenue by 57%. “The new Nvidia GeForce RTX GPU provides our largest-ever generational leap and demand is overwhelming. Nvidia RTX has made ray tracing the new standard in gaming… Our A100 compute platform is ramping fast, with the top cloud companies deploying it globally,” chief executive Jensen Huang said in prepared remarks.
“We swept the industry AI inference benchmark, and our customers are moving some of the world’s most popular AI services into production, powered by NVIDIA technology.”
Let’s also remember that NVDA made waves in September when it announced its acquisition of Arm Limited from Softbank (SFTBY - Free Report) for $40 billion, most of which will be paid in stock. Arm is one of the most important behind-the-scenes companies in the market and it could be a potential game-changer for Nvidia and the industry.
Yet even if NVDA’s Arm deal doesn’t make it through the various regulatory approval processes in the U.S., China, and the U.K., which could prove difficult and time-consuming, the company’s outlook remains strong. Zacks estimates call for its sales to surge 55% in the fourth quarter and 46% in Q1 FY22, with its adjusted earnings projected to climb by 48% and 40%, respectively.
More broadly, NVDA’s adjusted full-year FY21 EPS figure is expected to soar 68% to reach $9.71 a share on 51% higher revenue that would see it hit $16.5 billion. Nvidia is then projected to follow up this growth with 19% stronger earnings in FY22 and 20% higher sales.
Nvidia’s strong bottom-line revisions help it earn a Zacks Rank #1 (Strong Buy) right now. Investors should also note that 19 of the 26 brokerage recommendations Zacks has for Nvidia come in at a “Strong Buy,” with three more at a “Buy.” This helps showcase how high Wall Street analysts are on Nvidia.
As we mentioned at the top, Nvidia shares have been on an impressive run for five years, up 1,500%. This climb includes a 320% jump in the past two years to crush Apple’s (AAPL - Free Report) 250%, Amazon’s (AMZN - Free Report) 150%, and its industry’s 110% average. And the company even pays a dividend.
The nearby chart shows that NVDA has been taking a bit of a breather. The stock has hovered right near its 50-day moving average for the last two months and it closed regular trading Monday at $533, which put it about 10% off its early November records. This might set up a better buying opportunity for Nvidia, especially for those with a longer-term horizon.
Breakout Biotech Stocks with Triple-Digit Pofit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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