Market value: $150.3 billion
Dividend yield: 0.3%
Analyst ratings: 26 Strong Buy, 4 Buy, 5 Hold, 1 Sell, 2 Strong Sell
Chipmaker Nvidia (NVDA, $245.62) has been among the most rewarding, albeit sometimes frustrating, stock picks out there. NVDA stock is up more than 1,000% over the past five years, but it occasionally takes nauseating dives. For instance, a couple years ago, its processors were the favorites of Bitcoin miners. When the cryptocurrency bubble burst, it cut Nvidia’s stock price by more than half. But earlier this year (before the bear market set in, of course), the stock hit new all-time highs.
Nvidia’s GPU chips are designed for high-performance video games and other heavy-duty graphics users. While video games still are its bread and butter, the company is expanding into data centers, machine learning and self-driving cars, among other things, and that’s what is increasingly driving its gains.
Nvidia is very much a play on the future. But the present doesn’t look so bad either. A little more than half of its revenues come from gaming. If we’re looking at a prolonged period of spending more time indoors, home entertainment options such as gaming consoles look solid.
The analysts would seem to agree. Over the past 10 days, seven analysts reaffirmed their bullish ratings and an eighth upgraded the company to a Buy. The banks reiterating include Oppenheimer, Goldman Sachs, Wedbush, Merrill Lynch, Wells Fargo, Morgan Stanley and SunTrust Robinson. Needham’s Rajvindra Gill believes that GPUs will be increasingly used in medical applications in the wake of the COVID-19 outbreak, and he also believes the company’s “superior balance sheets remain supreme.”
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