Reports Q3 2021 results on Wednesday, November 18 after the close
Revenue Expectation: $ 4.41 billion
EPS expectation: $ 2.57
NVIDIA Corp. (NASDAQ 🙂 has emerged as the top performing chip stockpile during this global health crisis. The company thrived as demand for its products for the data center and video game markets soared during the pandemic.
As a result, the company's stock price has more than doubled, making it the third best performing stock this year. These gains have pushed its market cap to over $ 330 billion, making it more valuable than the combined value of its two main rivals: Intel (NASDAQ 🙂 and Advanced Micro Devices (NASDAQ :).
The California-based company's product mix responds to emerging trends, with a greater focus on technologies that enable remote working and virtual collaboration in home environments. When NVIDIA releases its third-quarter earnings later in the day, investors will likely see that, backed by NVIDIA & # 39; s powerful product portfolio.
NVIDIA is a provider of the key components required for all of the industry's major, fast-growing opportunities, including cloud computing, artificial intelligence, robotic automation, mobile computing and the Internet of Things.
Also, over the years, the Santa Clara, California-based company has proven to be ahead of its rivals in innovation and performance. In September, the Silicon Valley company announced a series of three new gaming graphics cards, based on the latest "Ampere" chip architecture, and said they will perform up to double its previous offering in the "biggest generational leap" in its history. .
More Upside
Also in September, NVIDIA moved to further strengthen its position in the AI ??market when it agreed to divest SoftBank Group's chip division ARM Ltd. for $ 40 billion. ARM's technology is at the heart of the more than 1 billion smartphones sold annually. Chips using the code and layouts are in everything from factory equipment to home electronics. The deal requires approval from both the US and China.
But most of the company's sales still come from PC gaming, where NVIDIA graphics chips create the most realistic experiences. Top-of-the-line GeForce parts cost more than many consumers spend on an entire PC.
Because of this strength, many analysts believe that NVIDIA stocks will continue their escalating journey and have more upside potential. Susquehanna analyst Christopher Rolland raised his one-year price target from $ 560 to $ 610 due to NVIDIA & # 39; s strength in gaming and data center markets.
In a letter to customers Rolland wrote:
"[W] e recognize the possibility of shortages for Ampere in C3Q20, but encourage investors to look beyond the short-term supply disruption and into the long-term, multi-dimensional growth story that should continue to unfold in C4Q, beginning 2021 and beyond. "
Bottom Line
After soaring this year, NVIDIA shares are not cheap. It is now one of the most valued chip stocks with a price-earnings ratio of 99. But the company's latest earnings will show that it continues to benefit from pandemic-driven demand and that the current growth cycle is still strong.
