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NVIDIA: A title to bet on again?

Who is NVIDIA? Simply one of the largest manufacturers of graphics processors, motherboards, and components for PCs and Consoles. It is a Nasdaq-listed company and has brought about 270 percent into investors’ pockets since 2019. In fact, today it quotes about $500, gives a very low dividend of $0.64, and has an EPS of 5.44 with a P/E of 91. NVIDIA (NVDA) brings home a whopping 11 billion in revenue in 2019 and has profits of nearly 4 billion usd. What makes NVIDIA even more interesting is its 5-year growth rate, estimated at 17.40 percent. In fact, the company is engaged in Robotics and Artificial Intelligence research that, in my opinion, could bring great satisfaction in the years to come.

Who is NVIDIA
NVIDIA Weekly Chart. From Webank’s T3

Here is important news for NVIDIA: The acquisition of ARM.

ARM Holdings is a technology company in the United Kingdom. It has a line of processors based on the ARM architecture that is characterized by low power consumption. What does that mean,it “sucks” less battery power. ARM has been talked about quite a bit lately because it has been chosen by APPLE for chip production. Apple, which has thus discarded Intel (in webinars a few months ago we in fact recommended focusing more on AMD than INTEL. We see the result today).

Nvidia had to pay $40 billion for ARM to SoftBank, which owned it.

“This union has incredible benefits for both companies, our customers and the industry. For the ARM ecosystem, the combination will increase ARM’s research and development capabilities and expand its intellectual property portfolio with Nvidia’s GPU and artificial intelligence technology,” said Jen-Hsun Huang, CEO of Nvidia. “Nvidia is the perfect partner for ARM” said Masayoshi Son, president and CEO of SoftBank, echoed by Simon Segars, CEO of ARM, emphasizing “the excitement of joining with Nvidia to write the next chapter together“.

A union that could therefore write history for NVIDIA as well. That is why my Buy idea on the stock remains, despite the fact that it is discounting very high multiples. Indeed, it would be useful to wait for a price retracement. I staggered the inputs in 3 stages if I were to enter NOW. Actually, on a personal level, I took the title much lower. But let’s take a look at the levels highlighted by the black lines:

Who is NVIDIA
Nvidia Daily Chart

It is also not out of the question that this stock may not see those levels and continue the uptrend as early as today itself after making a mean reverting in price. But these are ideas.

To invest in the sector there are several ETFs, which I personally like to diversify the portfolio. Some of these include NVIDIA and other technology stocks. But I want to stay specific: artificial intelligence. And I want NVIDIA. There goes the research, because it’s true that ETFs with NVIDIA exist galore, but you have to look closely at the securities within the basket. You often find the usual unspecific companies. So always check the components of an ETF.

If you want to know which sector ETFs we have taken for the next few years follow us on the dedicated telegram channels!

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