As the world embraces the “new normal,” dependence on technology will only increase. Many companies have developed innovative products and services through constant research and made a breakthrough in the market that have become a part of daily life for consumers and businesses.
It’s also possible that mega-cap tech stocks become less attractive if the regulatory environment becomes more stringent in the times to come and might call for diversification of the tech stocks in your portfolio. Most of the tech bellwethers that are exposed to the antitrust probe could lose their appeal in the market. This could result in investors adding smaller breakthrough tech stocks to their portfolios owing to their long-term growth potential.
November could be a slightly volatile month due to the Presidential Elections and uncertainty over the coronavirus aid package. The $2 trillion aid package has been adjourned until November 9th by the Republicans. Concerns over the second wave of coronavirus and a fragile economy will also weigh on investors.
NVIDIA Corporation (NVDA)
NVDA is one of the biggest manufacturers of graphics processing units (or GPUs) which are one of the most critical Components of gaming, AI, and autonomous vehicles. Besides GPUs, NVDA also allows scientists and researchers to conduct high-performance applications with higher efficiency through its parallel processing capabilities. In 2018, the company also ventured into mobile computing. It manufactures Tegra mobile processors for tablets, smartphones, entertainment systems, and automobile navigation.
NVDA believes in growing through the inorganic route and has been making strategic acquisitions to add capabilities to its data centers and AI platforms. On September 13th, NVIDIA and SoftBank Group Corporation announced that the former will acquire Arm Limited from SBG in a deal worth $40 billion. Arm specializes in designing smaller chips for an entire range of connected devices. NVDA aims to combine its world-class AI computing with Arm’s enormous ecosystem to create a cutting-edge AI company for larger, high-growth markets.
NVDA’s revenue for the second quarter ended July 2020 was $3.9 billion, up 50% from the same period a year ago. Its EPS also climbed 10% year-over-year to $0.99. NVDA also completed the acquisition of Mellanox Technologies during the quarter. The consensus estimate for NVDA’s revenue for the third quarter indicates a 46.4% increase year-over-year to $4.4 billion. EPS for the quarter is expected to grow 43.8% to $2.56.
On a year-to-date basis, NVDA surged 127.7% to close yesterday’s session at $505.08. The stock is trading 16.6% below its 52-week high of $589.07. Even as NVDA’s professional visualization and automotive platforms were hit by the pandemic, the company is well-placed to grow on the back of its strength in gaming, cloud computing, autonomous machines, and AI.
How does NVDA stack up for the POWR Ratings?
B for Trade Grade
B for Buy & Hold Grade
B for Peer Grade
B for Industry Rank
B for Overall POWR Rating
NVDA is also ranked #5 out of 86 stocks in the Semiconductor & Wireless Chip industry
Adobe, Inc. (ADBE)
ADBE is a hi-end designing software and video editor. The company also offers a plethora of cloud-based products for web development, video editing designing, and photography. Illustrator, Photoshop, and After Effects are some of the major media editing tools offered by ADBE available via subscription.
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