The 1993 internet revolution was a game-changer for tech companies. Some of the most notable ones include Amazon, Google, Meta (Facebook), Apple, Microsoft, and Netflix, and early stock investors saw huge returns in both the long and short term. It’s 2023, and there is a new tech revolution in progress - A.I. And at the center of this revolution is one company — Nvidia. Is now the time to buy NVDA? Let's speculate on the long-term price of Nvidia stocks based on some factors that could influence its performance and growth.
Why is Nvidia at the forefront of artificial intelligence?
Nvidia is the leading hardware company that has led the way for artificial intelligence (A.I.) in recent years. The company's products and services include graphics processing units (GPUs), data center platforms, powerful gaming hardware, and recently automotive solutions. Nvidia's success is primarily due to its dominance in the GPU market, which is essential for A.I. applications that require high-performance computing and parallel processing. According to a report by Jon Peddie Research, Nvidia had a 79% market share of discrete GPUs in Q4 2022, followed by AMD with 21%.
Nvidia's GPUs are widely used by cloud service providers, Machine Learning Languages (MLL) gamers, and gaming developers, who need fast and efficient processing power. And all of those industries and services are blooming right now.
Moreover, NVIDIA’s NVLink is the world's first (and only) high-speed GPU interconnection, offering multi-GPU system connections. Connecting multiple graphics cards with NVLink enables huge scaling of memory and performance to meet the massive demands of A.I. workloads. Right now, nobody does it better.
Nvidia’s latest projects
In addition to Nvidia’s Natural Language Processing (NLP), Nvidia has been investing heavily in research and development to create cutting-edge solutions that can enable new capabilities and experiences. For example:
- Jarvis, an end-to-end framework for building conversational A.I. applications that can understand speech, language, and vision
- Omniverse, a platform for creating realistic simulations and virtual worlds
- Isaac Sim, a tool for training robots in realistic environments
- Drive AGX Orin, a system-on-a-chip for autonomous driving
More fields and industries in need of Nvidia technology
As A.I. advances into many areas of business and society, Nvidia will have more opportunities to leverage its expertise and products to capture new markets and customers. Until other companies catch up, Nvidia is the big dog on the block. Companies currently not using A.I. are already exploring the potential.
Some examples of how A.I. could expand and transform various domains include:
- Healthcare: faster diagnosis, instant and personalized treatments, drug discovery, medical imaging analysis, and remote monitoring.
- Education: enhanced learning outcomes, curriculum design, student engagement, and assessment feedback accessibility.
- Entertainment: the creation of immersive interactive content such as games, movies, music, and art.
- Manufacturing: optimizing production processes, real-time quality control, and managing supply chains with flawless performance.
- Retail: improved customer service recommendations, real-time inventory management, and proactive pricing strategies.
These are just some examples of how A.I. could revolutionize various industries and sectors in the future, creating new demand for Nvidia's products and services.
Would a recession cause NVDA to fall?
Many traders are somewhat apprehensive about trading stocks, given that recession fears are high, and we all know what happened during the last downturn. But, tech giants with strong balance sheets saw their stock prices soar after the last recession, which ended in July 2009. Apple rocketed almost 900%, Amazon more than 2,000%, and Microsoft rose more than more than 500%.
In fact, according to an article by Fast Company, big tech companies invest more in times of recession and always come out stronger.
Trading NVDA
Those who bought NVDA back in 2019 saw their investment grow by over 600%, reaching a high of $342. Then came a troublesome 2022, loaded with supply & demand issues, which caused NVDA to fall to $112 in October.
October 2022 marked the beginning of the current bull run, rising 141% to $270. But the current bull doesn’t mean it’s too late to add NVDA to your portfolio. A similar dilemma was true for Amazon, Google, Meta (Facebook), Apple, Microsoft, and Netflix over the last decade.
Nobody can predict the markets with 100% confidence, but with Nvidia, it all comes down to four simple questions:
- Will A.I. fizzle away, or is it here to stay?
- Will Nvidia fail to meet the hardware needs of A.I.?
- Is there a competitor out there challenging Nvidia’s technology?
- Is NVDA overbought and due for a radical correction?
If you believe the answer is no, no, no, no, then trading Nvidia is a no-brainer. It’s plausible to speculate that Nvidia's stock price will continue to rise over time, so long as it maintains its leadership position in the GPU market, and continues to innovate and serve the increasing adoption of A.I. across various domains.
Of course, there’s never a guarantee in trading. There are some challenges and risks that could affect Nvidia's stock price negatively, such as regulatory uncertainties on A.I., and perhaps ethical issues in the future.
As always, a bullish estimate is subject to change, and in the tech world, change comes quickly, therefore, it is advisable to do your own research with due diligence before making any investment decisions regarding Nvidia stocks or any other stocks related to AI technology.
