Are Nvidia Stocks Worth Investing? How To Buy Nvidia Stocks (NVDA)?

Nvidia, a leader in graphics processing unit (GPU) technology, has recently captured the interest of Wall Street investors. The surge in popularity of artificial intelligence (AI) and its involvement in cryptocurrency mining have played a crucial role in Nvidia's growth, propelling its NVDA stock price to record highs.

If Nvidia sustains its current growth trajectory, it could become the sixth company to achieve a market capitalization of $1 trillion. What factors have propelled Nvidia's success in this competitive landscape? Additionally, how has its stock price evolved in recent years? Let’s delve into these questions in the following article.

1. Overview of Nvidia and the AI Industry

According to updated information from Wikipedia, Nvidia Corporation, or Nvidia, is a multinational American technology company founded on April 5, 1993 by Jensen Huang in Delaware and headquartered in Santa Clara, California.

This is a software company specializing in the design of graphics processing units (GPUs) used for cloud computing, supercomputing, mobile computing, tablets, or entertainment and navigation systems. In addition, Nvidia has also expanded into areas such as data science, high-performance computing, and the automotive industry.

However, the focus and the source of Nvidia's success lies in the GPU segment. Therefore, in the scope of this article, we will delve deeper into this aspect.

Nvidia's revenue in 2023 was approximately $26.97 billion; total assets were around $41.18 billion with a global workforce of approximately 26,196 employees.

Initially, Nvidia focused on producing GPUs for video games, but the realization that these chips could be leveraged for AI transformed its trajectory. Major tech companies like Amazon, Google, Meta, and Microsoft began acquiring Nvidia chips for data processing.

In 2021, Tesla also announced its use of Nvidia’s supercomputer chips to enhance the autonomous capabilities of its vehicles. The rise of generative AI technologies, such as ChatGPT and Google Bard, has further underscored the importance of GPUs, which significantly accelerate model training and enable learning from vast datasets.

Nvidia is committed to ongoing R&D, aiming to release new GPU models that are expected to operate at double the speed of their predecessors, fueling optimism for the company's future growth.

2. Are Nvidia Stocks Worth Investing In?

Nvidia holds a technological edge and strong market position in the graphics card sector, bolstered by significant R&D investments and robust patent protections. Financial data shows that Nvidia's profitability far exceeds that of competitors like AMD and Intel, and it maintains a leading market share. With the Federal Reserve nearing the end of its rate hike cycle, concerns about corporate funding have eased.

Considering the investment landscape for Nvidia stock in 2024, several points emerge:

AI Industry Growth: The AI market is projected to expand from $100 billion to nearly $20 trillion over the next decade, and Nvidia is crucial in this development, providing chips like the A100 for training AI models.

Diverse Applications: Nvidia is moving beyond the traditional gaming market to mobile computing and AI-based audio and video processing, diversifying its revenue streams.

Cryptocurrency Demand: While the future of the cryptocurrency market remains uncertain, the continued use of proof-of-work technology could boost demand for Nvidia's GPUs.

In summary, given the positive AI outlook and emerging applications, Nvidia stock could be a worthy consideration for investors in 2024. However, it's essential to evaluate risks and personal risk tolerance before making any investment decisions.

Nvidia Stock Performance Overview

Nvidia stock has reached an all-time high since its listing, soaring over 214,109% from its price of $0.82 in January 1999. The stock has recently formed a double-top pattern, with the latest peak at $329.81 on November 19, 2021, during a period of widespread financial enthusiasm and when Bitcoin also hit its all-time high.

However, the stock saw a significant decline, dropping to $112.27 in October 2022. This downturn reflected broader macroeconomic challenges, including a 21% revenue decline in Nvidia's Q4, driven by a slump in the gaming sector. High inflation rates impacted gamers' purchasing power, contributing to this decline.

This period coincided with turmoil in the cryptocurrency market, including the collapse of Terra and the fall of FTX, which affected many related entities and led to legal issues for Sam Bankman-Fried.

Fortunately, Nvidia's robust financial position mitigated the impact of this temporary recession. The company continues to dominate the discrete GPU market with a 78% share, maintaining its leadership through ongoing technological innovation. This resilience suggests that Nvidia's stock remains an attractive option for investors.

Nvidia Stock Forecast for 2024/2025

Looking ahead, experts from Stockscan forecast that Nvidia Corp (NVDA) will see its stock price rise to an average target of $1,100.83, representing a potential increase of 16.87% from the current price of $941.96 over the next 30 days. Analyst price targets range from $1,021.63 to $1,180.03.

Analysts rate NVDA as a "Strong Buy," with 18 technical indicators showing 11 Buy, 2 Sell, and 4 Neutral signals. The current market conditions suggest it might be a good time to buy NVDA.

Relative Strength Index (RSI): NVDA has an RSI of 58.21, indicating a neutral short-term position.

Stochastic Indicator: At 80.10, this suggests that NVDA is approaching overbought territory, but still remains at a high level.

StochRSI: With a rating of 63.19, it indicates a balanced market without strong buying or selling pressure.

Average Directional Index (ADX): At 14.28, it suggests potential price movement, though with limited confidence.

Commodity Channel Index (CCI): At 85.09, it shows that NVDA is still in slightly overbought territory.

For 2025, Nvidia's stock is expected to average $3,887.16, with a potential high of $5,231.05 and a low of $2,543.27—representing a remarkable 312.67% increase from the current price of $941.96.

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