2024-06-17 17:20:55 ET
Summary
- Nvidia Corporation has experienced significant growth in stock price and financials, driven by the AI industry's expansion.
- Nvidia dominates the AI chipset space, but is facing long-term competitive pressure from other players.
- Strong fundamentals and potential for more growth, but we examine its real value to see if it's too risky for investors to enter at current levels.
Nvidia Corporation (NVDA) has seen huge growth recently, not only in its stock price but also in its company financials. The artificial intelligence ("AI") industry has been compared to the Internet boom in the early 2000s, with continued growth in the total addressable market in the short and long term. Nvidia’s data center products have seen tremendous growth in annual reporting for 2023 and current quarters in 2024. Cost ratios during the annual 2023 report showed reductions as utilization of manufacturing lines drives efficient operations for the chipset industry. Overall, a strong 2023 year and continued expectation of growth are driving this company at the moment.
Short-term, Nvidia has dominated the chipset AI space. Long-term competitive pressure will increase as other players such as Advanced Micro Devices (AMD), Qualcomm (QCOM), Apple (AAPL), and others begin to enter or reduce their risk away from only Nvidia AI chipsets. Aside from the long term, recent quarters have shown some revenue decline from the previous highs, likely signaling a correction in the stock is due. Most growth has likely been baked into the stock now, making current levels risky for investors to enter. AI applications have also still lagged a bit in the industry, bringing skepticism to current total addressable market, or TAM, estimations. These headwinds can impact Nvidia in the short and long term....
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For further details see:
Nvidia Stock And Its Real Value