NVIDIA gains 60%: Why it keeps on climbing?

Author: SimpleFX | Category: Education

A closer look at NVIDIA

NVIDIA was quick to recover when everything in the financial markets quivered before the deadly coronavirus. NVDA.US made a huge 12% drop on March 12 when the pandemic was announced.It fell to $215 from its closing price of $246 the previous day. However, it easily wiped the recent loss with an 11.4% gain the next day, swiftly reclaiming the dips it made in the same month. Why is this stock outperforming the rest?

SFX2NVDA.US performance in March, SimpleFX WebTrader

NVIDIA is a market leader in designing and manufacturing computer graphics processors, chipsets, and multimedia software. It was founded in 1993 by Jensen Huang, Chris Malachowksy, and Curtis Priem with the vision of the PC being a consumer device for gaming and multimedia. In 1999, NVIDIA offered shares to the public at $12 per share. Today, NVDA.US is performing nicely at $393 per share withover 60% increase this year to date.

SFX3NVDA.US daily chart, 2-year progress, SimpleFX WebTrader

The company's future is bright. It currently has a $242 billion market cap and a $10 billion revenue each year. It made outstanding developments in its four focus sectors namely gaming, automotive, professional visualization, and data center and edge computing. The tech giant gained a strong Q1 revenue this year at $3.08 billion with its gaming segments accounting for over 60%.

NVIDIA's GeForce platform now has 200 million gamers around the globe, including discrete PC GPUs, laptop GPUs, and GeForce Now game streaming service. The virtualized GPU (vGPU) July 2020 software is revolutionizing professional remote work efficiency for designers, artists, gamers, and data scientists. Companies with 500­-1,000 users of GPU-accelerated virtual desktops increased their productivity by 13%, contributing to about $1 million in annual savings. NVIDIA's data center solutions is a boom in the AI market, serving cloud-computing giants like Amazon and Microsoft. It boasts of a $1.14 billion revenue, which is up by 80% from last year, and a revenue of 39% year over year.

SFX4NVDA.US moves above 50, 100, 200-day SMAs, SimpleFX WebTrader

NVDA.US is currently creeping above the 50, 100, and 200-day simple moving average lines since April this year. Analysts expect NVIDIA revenue to rocket 34% this year to $14.64 billion and go up another 17.5% next year. Its datacenter sales could reach $6.5 billion this year, even surpassing its gaming sales at $6.1 billion. Meanwhile, NVIDIA's partnership with Mercedes-Benz to employ new DRIVE platform technologies in 2024 is a hot topic among investors and traders.

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