The case for adding Nvidia to your watch list – A company that has the potential for long term success
A few people have reached out to get our opinion on NVDA, so here is what we think of Nvidia.
Nvida builds high end graphic processors which are powering the latest technology. Nvidia is commonly found in your computer pushing graphics to your display, but Nvidia has been moving upstream helping unlock much of the innovation we are accustomed to.
For example:
Graphics cards in the latest gaming systems to help unlock speed and details for game makers
Metaverse
Amazon Robotics
Pepsi Kinetic Vision
Sequencing the human genome
Artificial Intelligence, better known as AI – Yes, Nvidia is all over this and helping the technology move forward
Image generation
Speech
Security
Medical Imaging
Autonomous Vehicles
Mercedes Benz
Jaguar Land Rover
Lucid
Nio
GM
As you can see, Nvidia makes graphic processors to help power our cars, gaming system and latest technology available. This is why you really should consider owning or having some exposure to Nvidia via stocks or ETF’s.
Some metrics to take note of:
They have gone through chip shortage issues from ‘21-‘22 producing a 62% decrease in their stock price. They have also seen positive momentum and upside in the last weeks. Is this here to stay though?
As this year started, NVDA continued to climb from the end of 2022 along with the tech sector at the start of this year to regain some loss ground with a +20% increase.
More recently, NVDA has been in the news in relation to ChatGPT and Microsoft’s $10B investment in OpenAI the maker of ChatGPT platform. This has given the stock price another boost, 34% on top of the run from last year.
ChatGPT released at the end of November, is a natural language tool driven by artificial intelligence technology used for a wide variety of tasks such as writing blogs, helping do research for a specific topic, helping code a website, helping identify a product to sell on Amazon as some key use cases. It has taken the tech space by storm because it introduces efficiencies or more exactness.
So what does it have to do with NVDA? ChatGPT has had a large scale of users since its inception and is said to have 100 million users since being introduced. All those users, all those queries, all that computing power needs to be supported by a strong chip backbone. Is AI and automation the next foreground with supply chain issues behind us to continue this epic rally in this stock?
There seems to be a lot of catalysts and reasons to reconsider, however remember not everything goes up in a straight line.
Where should I consider entering?
With NVDA earnings on February 22 investors will find out what direction we may be heading in the coming quarters.
Like we’ve said, everything comes back to test important levels. If you’re looking to add Nvidia stock, we suggest looking at a range $194 - 201, which is a drop of 5-7% from today’s price.
If earnings don’t go well, or the market in general continues to drop then we will look at entering somewhere in the upper $170 area for a run back into the $260 area.
Remember, we are not Financial Advisors – we have zero certifications in this space. However, we are just sharing our years of experience, technical and fundamental data on helping like minded individuals finding the right entry points to maximize their return or help reach a specific goal. Please consult an advisor before taking any risks.
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