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NVIDIA Corporation closed on November 22nd 2024, at $141.95 reflecting a 3.22% drop from the previous session. This was after posting a recent high of $152.89 at the beginning of the week. However, the company’s stock has still maintained a remarkable YTD return position as it has achieved 186.70% while the S&P 500 only 25.15%. The stock is standing at a very high 1-year return of 184.30% and remains to be one of the most dependable
and high yielding stocks in the tech niche. Currently, NVIDIA had a trading volume of 236 million shares which was below its average trading volume of 271 million shares which was an indication of a sustained demand in the share.
Market Cap: $3.476 trillion
PE Ratio (TTM): 56.11, reflecting significant growth expectations
Profit Margin: 55.04%, indicative of exceptional profitability in a competitive industry
EPS (TTM): $2.53
Revenue (TTM): $96.31 billion, supported by robust growth in AI and data centers
Return on Equity (ROE): 123.77%, highlighting efficient capital usage
The company has also sustained good cash reserves with cash of $34.8 billion as well as a low debt to equity ratio at 17.22%. This kind of financial health has laid NVIDIA in motion to retain its poise in AI and semiconductor technology.
There was record breaking Q3 FY2025 revenue of $35.1bn, this is a 94% increase year on year. Data center was the star performer accounting for $30.8 billion or up 112% year over year as AI driven enterprises take shape.
CEO Jensen Huang pointed out “The age of AI is in full steam, propelling a global shift to NVIDIA computing.” This is due to expectations for the Blackwell architecture of NVIDIA, and the increasing popularity of the Hopper GPUs.
For NVIDIA, 39 firms gave a rating of a “Buy,” and Bank of America has set a price of $190. The consensus price target of $164 .15 is once again an affirmation of the increased confidence on NVIDIA performance in the future. This perhaps can be attributed to its specialties in AI hardware and gaming even as other sectors under the semiconductor have relatively high risk and fluctuations.
NVIDIA’s technical analysis shows that it has been bullish over the past year, recently hitting an all-time high of $152.89. After the high, the stock has been in a retracement, with potential support at $130, a strong support level that may hold against further declines.
Resistance remains at the $152.89 level which is the recent high, and a breakout above this could signal further upside. Investors should watch for additional upward momentum, driven by the company’s stellar earnings and continued AI demand.
AI Leadership: The vast market share in AI and data centers guarantees that NVIDIA is the leader in advancing the Technologies.
Strong Financials: Analysing the financial results we can state that NVIDIA is financially secure due to high profitability, large cash stock, and performant revenue growth.
Analyst Optimism: Consistently high ratings and increasing price targets from major firms signal strong investor confidence.
1. Valuation Risks: A high PE ratio of 56.11 makes the stock vulnerable to corrections during broader market downturns.
2. Sector Volatility: The semiconductor industry’s cyclical nature poses potential risks.
3. Macroeconomic Concerns: Rising interest rates and geopolitical tensions could impact growth in the AI and semiconductor markets.
Given its impressive financial performance, leadership in AI technology and continued market confidence, NVIDIA remains a Buy for long-term investors. However, cautious investors may consider waiting for a dip closer to the $130 support level before entering.
Looking at NVIDIA Corporation in relation to its innovative strategy, centring on artificial intelligence, and its impressive financial statistics, the firm tops the rankings as a leading player in the currently evolving tech industry. Nevertheless, it offers long-term potential that could well become obscured by the short-term fluctuations of the market.
A number of factors that are for and against should be considered as well as investors’ risk tolerance level and investment horizon.
