Nvidia Share Price Forecast November 2021 – Time to Buy NVDA?
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Nvidia Share Price Forecast November 2021 – Time to Buy NVDA?
Shares of graphics specialist Nvidia (NASDAQ:NVDA) are in the green today, closing at $326.74 as of November 25th (22:47 EST). The shares surged after the company announced its 2022 third-quarter results. As customers upgraded to its latest graphics cards, the gaming business played a key role in Nvidia’s growth last quarter.
Nvidia – Technical Analysis
As revealed by Nvidia’s financial statement, the market cap of the company is at $816.85 billion with total assets worth $38.65 billion. Revenue for 2020 was at $ 16.68 billion with a profit margin of 25.99% compared to $10.92 billion in 2019.
Oscillators for Nvidia such as Relative Strength Index (14)(71.59), Stochastic %K (14, 3, 3)(65.29), Commodity Channel Index (20)(110.37) and Average Directional Index (14)(50.01) are neutral. On the other hand, moving averages such as Exponential Moving Average (10)(311.63), Simple Moving Average (10)(311.31), Exponential Moving Average (20)(294.96), Simple Moving Average (20)(295.56) and Exponential Moving Average (30)(281.17) are indicating a buy action.
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Recent Developments
Nvidia’s largest source of revenue last quarter was its gaming segment which accounted for 45% of the top line. As the company focused on boosting graphics processing unit (GPU) supply to meet the huge end-market demand, the revenue from this segment shot up 42% year over year to $3.22 billion. Additionally, because high-end laptops are in demand, Nvidia’s laptop GPUs saw a sharp jump in demand from the prior-year period. Almost 85% of its installed base needs an upgrade to the RTX series cards, which has contributed to the massive sales of its latest Ampere architecture cards.
Nvidia is taking steps to ensure that it continues to dominate the GPU market, with plans to bring ut a new GPU in 2022. Nvidia’s next-generation graphics cards, code-named Ada Lovelace, is expected to have double the number of cores on the existing Nvidia GPU series and will be based on a 5-nanometer (nm) manufacturing process. The company’s current generation Ampere cards are based on an 8nm manufacturing process. Nvidia will increase the computing power and the power efficiency of its next-generation GPUs by shifting to a smaller manufacturing process. Nvidia is also seeing growth with its GeForce Now cloud gaming service due to the increased adoption of cloud-based gaming. By using deep learning super sampling (DLSS) technology, it takes low-resolution images and scales them up to high resolutions for display on high-res screens by using AI technology.
Should You Buy NVDA Shares?
Nvidia’s fundamentals appear to be as strong as ever with accelerated growth in the core business segments and an upbeat outlook. It delivered record revenues of $7.1 billion, up 50% year over year, with Gaming revenue of $3.22 billion and the data centre segment generated sales of $2.94 billion, up 55%.
But NVDA can be valued more than it actually is if such expectations for future financial results are taken into considerations. NVDA trades at a P/E ratio of 74 times which is the second-highest multiple among the 20 largest companies by market cap. So it should attract investors who think that the long-term opportunities in tech might be underappreciated today. But more value-conscious investors will be discouraged by valuation multiples. Additionally, the timing for the full development of the Metaverse is still something that cannot be pinned down. However, Nvidia’s existing business will do much of the heavy lifting until Metaverse is finally developed and launched.
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