25 Mar Buy Nvidia (NVDA)
Nvidia (NVDA) is a long-term stock market survivor because it has transformed itself several times to stay at the forefront of technology innovation. For some time now, the company has been able to do no wrong as managers have positioned the company to be in the middle of all the most exciting computing applications.
When cryptocurrency became a thing and software developers rushed to build bitcoin mining rigs, naturally they turned to Nvidia gear. Almost overnight, a new $300 million business developed.
Nvidia is now positioning for the next big wave and that will come from Cloud Computing. Or more specifically, where the digital information is being collected to then be stored in the Cloud. That transition from storing to collecting is going to be huge and Nvidia will be a key player.
Jenson Huang, Nvidia’s chief executive officer has a big vision for what is termed ‘edge computing’. He sees networks of small boxes attached to everything from light posts, to buildings and communications towers. These little black boxes will process information on the fly and bounce the rest of the data into the Cloud. He calls it the Smart Everything Revolution.
To connect the black boxes to the cloud is the Nvidia EGX Supercomputing platform. A combination of cutting-edge hardware and software based on virtual radio access networks. Nvidia is working with Swedish company, Ericsson to manage this. This will help Ericsson catch up to Huawei in the race to build out cost competitive fifth generation wireless networks. It also gives America an alternative to the Chinese made product.
It is not inconceivable the US turns to the Nvidia solution for its entire 5G network seeing as they already do not see eye-to-eye with Huawei. Nvidia could end up as the single sole supplier of 5G infrastructure in the US.
NVDA shares have recently been slammed with the rest of the market. After pushing near $320 in February, the stock is now down near $250. This weakness offers an amazing opportunity to add the company to your portfolio
Huang has been a masterful manager that has survived the changes in the tech industry with a very healthy track record of creating wealth for shareholders. Even after this recent fall the 10 years returns he has created are in excess of 27% compounded per year. He will guide Nvidia through this coronavirus and also position it for the next big move in the tech revolution
Buy NVDA at $230 and place a stop loss at $189