Nvidia Corporation (NASDAQ:NVDA)
NVIDIA’s Rise to Trillion Dollar Club
Anticipation of increasing chip demands due to faster adoption of Generative AI has made the Nvidia Corporation (NASDAQ:NVDA) i.e. Nvidia Stock price to rise by 200 % in less than a year and Join the most elite trillion dollar club of U.S.
The Artificial Intelligence(AI) buzz around the globe has increased tremendously after launch of ChatGPT, and everybody got the see the power of AI after using it. We can consider it ChatGPT as a first application which got recognized globally and truly introduced the capabilities of AI to the world.
While world got to experience the capabilities of AI, Tech Companies also noticed the potential and huge opportunities in this space and started planning about products they may offer in AI or mainly in Generative AI for now.
Seeing Opportunity Big tech Giants have shifted their focus towards AI , Hoping the demand rise in Generative AI Space and its applications. To build and Run Generative AI application main component for its infrastructure was, It required powerful chips called Graphical Processing Units(GPUs) and here NVIDIA came into picture. Nvidia is market leader in the space of GPUs and has near to 80% or more market share according to the market analysts. This was the huge up move in demand for Nvidia as it was mainly making GPUs for Gaming Industry but now to fulfill the surge in adoption of AI Nvidia was on forefront to meet the GPU need.
The company’s business had witnessed rapid expansion during the pandemic when gaming took off, cloud adoption surged and crypto enthusiasts turned to its chips for mining coins. Nvidia’s bet on AI is expected to fuel growth in the coming time.
AI bet proved winning for Nvidia and Sudden demand rise anticipation for GPU’s has sky rocketed the price of Nvidia Share and it has risen by 200% making it join trillion dollar club.
Why is Nvidia Stock going down today / why is nvidia share price falling ?
If we see stock price of Nvidia it has tripled the wealth of share holders in less than a year.
On 7th of October 2022 it was trading around $120 and from there it went on around $474 on 18th July 2023. So the Stock has given tremendous run up recently.
But we see that as August 2023 started stock price have went down from $465 to $423 which is near to 6 % down in a week’s time.
Talking about the fall in stock price, Some Analysts believes that the stock price is consolidating and this is healthy sign as the stock was trending in green since long time.
Some Analysts point outs recent fall in stock price to the reports rolling in market showing tech companies in loss who have increased there spending on AI , whereas companies with less adoption in profit indicating AI adoption is not fit for all and spending should be decided considering the value it can bring to businesses. Even though this seems to be valid reason it can slower down the AI adoption at scale.
Why is Q2 important for Nvidia shareholders?
Another reason we see in the recent correction in Nvidia stock price is that street is eying Q2 results supposed to come on August 23 and doubtful whether Nvidia will be able to meet the guidance considering rise in manufacturing cost.
Q2 results are also important as they will help to investor to know demand for the AI chips and economic value for the company.
Some experts are of the opinion that in the coming time Nvidia may face tough competition from Qualcomm and AMD in the space of AI Chips and may weaken its lead position in the future.
When to buy Nvidia stock / What to do with Nvidia stock ?
Even after Sky High Valuation some stock market experts are bullish on Nvidia share price and of the opinion to hold and believes that Nvidia’s AI chips business has room for growth as generative AI technology is still at a nascent stage and as the adoption will increase Nvidia , It will be beneficial for Nvidia. So this type of falls in share price can be considered by new share holders who want to buy Nvidia stock.
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(Disclaimer: We / Author do not advise to buy or sell any stocks, Kindly research/decide on your own for buying or selling the stocks. Information shared in the article is purely informative and not any financial advice. )