NVDA shares are a great buy for consistent, long-term gains

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Shares of chip and semiconductor designer Nvidia (NASDAQ:NVDA) shares seem unstoppable after the company’s latest earnings decline.

Source: Steve Lagreca / Shutterstock.com

NVDA shares have gained 18% since the company released third-quarter results on Nov. 17.

The latest increase brings Nvidia’s total earnings for this year to 162%. In the last month alone, the company’s share price has risen 51% and is now trading at $ 343.80.

Among technology stocks and especially chip makers, Nvidia was undoubtedly the winner this year.

The stock returned so much value to shareholders that even CNBC commentator Jim Cramer took it named one of his dogs per company.

Despite the incredible growth, many analysts monitoring the company see even more profits.

A closer look at the NVDA stock

The latest series of NVDA shares comes after the printing of the leader in Silicon Valley third quarter results this again overcame the unanimous position of Wall Street analysts and provided bullish forecasts for revenue in the current fourth quarter.

Specifically, Nvidia reported earnings of $ 1.17 per share compared to an expected $ 1.11, up 60% from the year before.

The company’s revenue was $ 7.10 billion compared to an expected $ 6.82 billion, up 50% from the same period in 2020.

While analysts are excited about the figures for the third quarter, they particularly liked that Nvidia said it expects to report $ 7.4 billion in revenue this quarter, more than analysts ’unanimous forecast of 6, $ 86 billion.

Nvidia has consistently exceeded analysts ’earnings estimates over the past five years, and has now beaten Wall Street’s revenue estimates for 10 consecutive quarters.

Maintaining an impressive string of victories is a fact the company had more demand as it can fill for its various chips, semiconductors and graphics cards.

Of particular interest is its “GeForce” graphics card, which is used in video game consoles and personal computers (PCs).

Gaming, which remains Nvidia’s largest market, reported $ 3.2 billion in sales in the third quarter, up 42% from $ 2.27 billion in the same quarter last year.

In addition, Nvidia has made progress in strengthening its own data center operations, where cloud providers and companies are turning to the types of graphics processors developed by Nvidia for artificial intelligence (AI) applications.

Nvidia reported data center sales of $ 2.9 billion in the third quarter, up 55% from $ 1.9 billion in the same quarter of 2020.

Nvidia said the growth was driven by sales of GPUs to cloud providers such as e.g. Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Google’s parent company alphabet (NASDAQ:GOOGL).

Overall, the amazing results have boosted investor confidence in Nvidia and its products.

Some problems with Nvidia

Despite all the success, Nvidia is not without some of the ongoing problems it manages. The company continues to try to buy Arma, a British company specializing in mobile semiconductor technology, worth $ 40 billion.

The business encountered some complications. The British government announced on 16 November that its Competition and Markets Authority would conduct an investigation antitrust concerns and business-related national security issues.

This came after the European Commission launched an in-depth investigation into the transaction in October.

The U.S. Federal Trade Commission also expressed concern about the transaction and what it could mean for competition in the chip sector.

Ongoing investigations into Arm’s deal, along with Nvidia’s strong results and growing dominance in the semiconductor space, some analysts have indicated that the acquisition of Arm will torpedo regulators around the world.

Nvidia’s senior management team has softened its language over the deal with Arm in recent months, perhaps to lower expectations regarding the approval of the purchase. For now, buying Arma for the company remains a long-standing question.

In addition, Nvidia continues to face a global shortage of semiconductors and delays in outsourcing its chips. However, to date, these problems only seem to have increased the demand for the company’s various products.

Finally, Nvidia has noticed enthusiasm over its penetration of cryptocurrencies in recent months.

The company released dedicated graphics cards earlier this year that can be used specifically for cryptocurrency mining.

This move was designed to meet some of the demands of people who use their computers for mining Bitcoin (CCC:BTC-USD) and other digital assets.

There was hope that cryptocurrency graphics cards would be a hit, but Nvidia said it sold as much as $ 105 million in the third quarter, down from $ 266 million in the previous quarter, and that sales declined. slows down greatly.

Buy and hold NVDA shares

Despite the global shortage of chips and constant efforts to acquire Arma, Nvidia is a company that strives for all cylinders. This fact is reflected in the share price, which has more than doubled to date.

Add to that the fact that Nvidia also pays healthy dividends (it paid $ 100 million in dividends in the third quarter alone) and there are many reasons for bullish stock preferences.

Among the 39 analysts providing 12-month price forecasts for Nvidia is average target price per share is $ 350. Today it is trading at around $ 326.

This is after the share price has risen by more than 150% this year. Among technology companies, Nvidia is the best species and is ahead of all. NVDA shares are a purchase.

On the day of Joel Baglole’s publication held long positions in NVDA, MSFT and GOOGL. The opinions expressed in this article are those of the author who are the subject of InvestorPlace.com Guidelines for publication.

Joel Baglole has been a business journalist for 20 years. He spent five years as a personal reporter for The Wall Street Journal, and also wrote for The Washington Post and Toronto Star, and for financial sites such as The Motley Fool and Investopedia.

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