Is NVDA Stock Going to Win Big in 2017?
NVIDIA Corporation (NASDAQ:NVDA) shot up six percent by early afternoon on Wednesday as analysts released positive estimated earnings for NVDA stock.
The big win for NVDA stock is the average earnings estimate that analysts are giving of about $0.86 per share, which is up a whopping 145.71% from last year’s $0.35 per share. This is, of course, a result of NVDA stock’s banner 2016, during which the company saw its share prices rise by 191% since the beginning of the year. (Source: “Stock On Watch: NVIDIA Corporation Just Recorded A Significant Increase,” Frisco Fastball, December 14, 2016.)
As for revenue estimates, 26 analysts have provided their consensus average for NVDA stock at $2.1 billion, again a huge swing upward from year-ago sales of $1.4 billion. (Source: “Stock’s Earning Overview: NVIDIA Corporation (NASDAQ:NVDA),” News Oracle, December 14, 2016.)
A final feather in the cap for NVDA stock is that the forecasted growth estimate for the current quarter is set to be 137.1%, with a per annum growth of 28.58%, as opposed to the 19.91% growth per annum seen over the past five years.
The key to NVDA stock’s success and growth in the future is expanding into lucrative markets like gaming (where it holds a current market share of 3.5%), artificial intelligence (AI), and the automotive industry. (Source: “Can Nvidia Corporation (NVDA) Stock Keep This Fire Burning?,” InvestorPlace, December 14, 2016.)
NVIDIA already has car chips in over 10 million vehicles across the world, positioning itself as the provider of choice for the industry. Not to mention that Tesla Motors Inc (NASDAQ:TSLA) uses the “NVIDIA Drive PX 2” in its autonomous car systems, and you have a stock that may be poised for success. The Drive PX 2, by the way, is reportedly 40 times faster than earlier technologies. With key improvements like this, it’s easy to see why NVDA stock had such a fantastic year.
The question is: can the company sustain this success? While many analysts are bullish on the stock, the chip market can be fickle at times, and there’s always the risk of new competitive technology in development. We’ll have to keep a close eye on NVIDIA as the new year rolls in to see just where this currently-on-fire NVDA stock will head next.