Nvidia believes it’s still in the early innings of the AI boom, which could make it a great long-term investment. By late 2020, it was what you need to start crypto trading 2021 apparent that a global semiconductor shortage was underway. This was creating major, escalating disruptions for consumers and for many global technology, auto, and consumer electronics companies that use chips in the products they make and sell.
How to invest
Taiwan Semiconductor Manufacturing Company (TSM -4.20%) (TSMC) is one of the world’s most-important tech companies despite not being a household name like some other big tech companies. It operates the world’s largest semiconductor (chip) foundry, manufacturing chips for companies’ specific needs. However, the supply situation is expected to see some improvement in 2022, reducing the risk of a supply disruption for NVIDIA. J.P. Morgan Research said in Accumulation distribution indicator early December 2021 that semiconductor companies it covers are increasing their capital expenditures significantly to meet demand, which should help to alleviate the shortage. While past outperformance is no guarantee of future success, Nvidia is in an excellent position to continue producing outsize returns.
It’s a leader in making semiconductors for AI, which has become a major growth driver for the company. C3.ai is one of the hottest stocks in artificial intelligence today. Learn more about the SaaS and whether it’s a good investment. Given its large market cap, Nvidia is among the top five holdings of the five largest ETFs by assets under management (AUM).
This catalyst could continue driving Nvidia’s profits higher. In its 2025 fiscal first quarter, the company produced $15.3 billion of cash from operations and $14.9 billion in free cash flow. The cash flow gave it the funds to invest in continued innovation while returning money to shareholders through dividends and share repurchases. Fellow tech behemoth Microsoft (MSFT -1.64%) is investing billions of dollars into OpenAI to help take the technology to the next level. Others in the tech sector have followed Microsoft’s lead and are investing heavily in AI startups and related infrastructure. This investment spending is driving strong demand for Nvidia’s processors.
NVIDIA Corporation NVDA said in a statement to Bloomberg that it has not received a subpoena from the U.S. Department of Justice (DOJ) related to an ongoing investigation into possible antitrust law violations. It means now more than ever, it’s important to have a disciplined approach around entering and exiting a trade so that emotions don’t take over. Emotional reactions lead to poor decisions, and that’s where most traders lose, Ryan said. When a stock is down, one of the easiest ways to slip is to start rationalizing why you think it will return, he added.
Nvidia CEO Jensen Huang Lost $10 Billion in 1 Day
© 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer. 783 employees have rated NVIDIA Chief Executive Officer Jen-Hsun Huang on Glassdoor.com. Jen-Hsun Huang has an approval rating of 99% among the company’s employees. This puts Jen-Hsun Huang in the top 10% of approval ratings compared to other CEOs of publicly-traded companies.
Does Nvidia pay a dividend?
NVIDIA’s board initiated a stock repurchase program on Wednesday, August 28th 2024, which authorizes the company to buy back $50,000,000,000 in shares, according to EventVestor. This means that the company could reacquire up to 1.6% of its stock through open market purchases. Stock buyback programs are generally a sign that the company’s management believes its shares are undervalued. It’s why ahead of any talk about stock-picking strategies or pattern identification, he believes traders must learn to mitigate risk so they never take a big loss. That’s done by deciding on an exit point ahead of taking a position and using a stop loss to execute it. Nvidia has also posted financial results to back this hype, increasing revenue and operating income by 122% and 174%, respectively.
Profit growth helps drive stock price appreciation over the longer term, making it an ideal area for beginning investors to focus on before buying shares of any company. The company generated more than $26 billion in revenue in its 2025 fiscal first quarter, up an eye-popping 262% year over year and 18% from the prior quarter. Nvidia has had a long history of innovation since developing the how to find the best day trading stocks GPU.
- That said, there are two companies that I’d be more likely to invest in at this point because there seems to be more long-term certainty around their businesses.
- With Apple’s track record of discipline, it was puzzling why so many Wall Street investors were seemingly shocked as Apple remained relatively quiet during recent AI mania.
- Nvidia’s June 2024 stock split brought its share price from a pre-split level of more than $1,200 to around $120 a share (and it was down below $110 a share in early August).
- NVIDIA Corporation ranks among the world’s leading microchip manufacturers and is best known for its contributions in the fields of graphics and gaming.
- Companies come to TSMC with a chip design, and it produces the chip according to the company’s request.
Company Ownership
The SPDR S&P 500 ETF Trust (SPY -1.68%) owns the most shares and has a meaningful portfolio weighting among the biggest ETFs. That makes it a solid option for investors seeking exposure to Nvidia. On a fundamental basis, he mainly screens for stocks with strong quarterly earnings, those up by 20% or more, but the bigger the better, he noted. Their annual earnings should also be solid, growing by at least 20% yearly over a three to five-year period. These companies should also be a leader in their sector and have high institutional sponsorship. It has also made Nvidia one of the hottest stocks on the market.
After a slump in Apple’s smartphone market over the past few years, I’m sure the company wouldn’t mind an extra lift from somewhere. Apple (AAPL -0.70%) didn’t reach the point of being the world’s most valuable public company by mistake; it has taken decades of non-complacency and disciplined execution. With Apple’s track record of discipline, it was puzzling why so many Wall Street investors were seemingly shocked as Apple remained relatively quiet during recent AI mania.
The company introduced the GeForce 256 in 1999, calling it the world’s first GPU. In January of that same year, NVIDIA went public through an initial public offering (IPO). Today, the company’s GPUs power many of the world’s fastest supercomputers. Upgrade to MarketBeat All Access to add more stocks to your watchlist.
The reasons for the shortage, which is continuing, are numerous. Federal Trade Commission (FTC) sued to block the acquisition due to antitrust concerns after a unanimous vote by commission members. The FTC said that the combination of the two chip companies would give NVIDIA unlawful control over technology that rival firms need to develop competing products. The commission also said that the combination would create the potential for a stifling of innovation in next-generation technologies, such as technologies used to power data centers and driver-assistance systems in cars. An administrative trial is scheduled to begin on Aug. 9, 2022, nearly two years after the deal was announced.
