Climbing to heights every session: Is this gain' kind justified?
Show Me the Money! 7 July, 2020, by Vladimir Rojankovski, Chief Analyst, Grand Capital
NVIDIA (NVDA) shares are climbing to new heights almost every trading session yielding year-to-date more than 65%. Is this kind of gain justified?
Nvidia is a leading PC designer of graphics processing units that enhance the experience on computing platforms. The firm's chips are used in a variety of end markets, including high-end PCs for gaming, data centers, etc. We remember the days of company’s glory when cryptocurrencies mining was very popular. Although those days are gone, NVIDIA continues to serve its traditional customers’ needs and actually finished the previous quarter with a positive absolute return as the company posted a solid revenue growth to the tune of +41% after a few quarters of declines.
Its forward P/E ratio of around 50 may look a bit excessive; however, its free cash flow growth of around 85 percent over the last year and its 3-year revenue growth of 18 percent still envision more room for expansion. We think NVIDIA should continue to see strength in datacenter demand as well as gaming, despite the effects of COVID-19.
NVIDIA (NVDA) shares are climbing to new heights almost every trading session yielding year-to-date more than 65%. Is this kind of gain justified?
Nvidia is a leading PC designer of graphics processing units that enhance the experience on computing platforms. The firm's chips are used in a variety of end markets, including high-end PCs for gaming, data centers, etc. We remember the days of company’s glory when cryptocurrencies mining was very popular. Although those days are gone, NVIDIA continues to serve its traditional customers’ needs and actually finished the previous quarter with a positive absolute return as the company posted a solid revenue growth to the tune of +41% after a few quarters of declines.
Its forward P/E ratio of around 50 may look a bit excessive; however, its free cash flow growth of around 85 percent over the last year and its 3-year revenue growth of 18 percent still envision more room for expansion. We think NVIDIA should continue to see strength in datacenter demand as well as gaming, despite the effects of COVID-19.