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24/7 Wall St. Insights
- While announcing upcoming products, Nvidia Corp. ( NASDAQ: NVDA ) has committed to a year-over-year refresh cycle.
- It will be a driver of growth for the company and its stock going forward.
- Also: Discover the next Nvidia .
Nvidia Corp. ( NASDAQ: NVDA ) Chief Executive Officer Jensen Huang has said the company plans to upgrade its artificial intelligence accelerators every year . It has announced a Blackwell Ultra chip for 2025 and a next-generation platform in development called Rubin for 2026. By handling complex tasks more quickly and accurately than ever before, the platform will be a valuable tool for developers and researchers working on cutting-edge AI projects.
Huang did not offer detailed specifications for the Rubin platform and upcoming products, but did stress the company’s commitment to a year-over-year refresh cycle. That should be a driver of Nvidia’s growth going forward.
Why Invest in Nvidia?
Is now the time to buy Nvidia shares?
Nvidia stock is up more than 270,000% since it went public. Most of that gain has occurred in the past two years, along with the huge wave of interest in artificial intelligence (AI). Shares were last seen trading for around $108 apiece.
The company says it pioneered accelerated computing to tackle challenges no one else can solve. Its work in AI and digital twins is transforming the world's largest industries and profoundly impacting society. Nvidia also says it engineers the most advanced chips, systems, and software for the AI factories of the future. And it builds new AI services that help companies create their own AI factories.
The company has paid a quarterly dividend since 2014, but the current yield is just 0.04%. The stock outperformed the S&P 500 in 2023, ending the year more than 646% higher. The question is whether the shares are likely to continue rising, driven by this annual refresh cycle.
Nvidia, the Company
A multinational technology company that specializes in graphics processing units and AI.
The company designs and sells products and platforms for GPU-accelerated computing in the United States, Taiwan, China, Hong Kong, and elsewhere. Its products are used in gaming, professional visualization, data center, and automotive markets. It sells its products to original equipment manufacturers, original device manufacturers, system integrators and distributors, independent software vendors, cloud service providers, consumer internet companies, add-in board manufacturers, distributors, automotive manufacturers, tier-1 automotive suppliers, and other ecosystem participants.
Nvidia headquarters are in Santa Clara, California, which is in Silicon Valley. The company was founded in 1993 by current its chief executive, Jensen Huang, and engineers from IBM and Sun Microsystems. The company went public in January of 1999. It competes with or is similar to Advance Manufacturing Devices Inc. ( NASDAQ: AMD ), Intel Corp. ( NASDAQ: INTC ), and others.
Shares of Nvidia tumbled after the recent quarterly report, wiping out hundreds of billions of dollars in value in one day. Markets and investors were shaken, as Nvidia has largely been driving the artificial intelligence wave of the past year or so. Earlier in the summer, Nvidia effected a highly anticipated 10-for-1 stock split. Products released this year include Omniverse, Riva, Morpheus, and Clara software platforms, as well as GeForce RTX graphics cards and Tensor Core GPUs.
Nvidia, the Stock
Wall Street remains optimistic about Nvidia stock.
Despite the recent pullback, the share price is about 118% higher than it was at the start of the year. In that time, the S&P 500 is up less than 14%. Note that the $144.84 mean price target is only a few bucks higher than the 52-week high but represents almost 35% upside in the next 12 months. The consensus recommendation of analysts is to buy shares of Nvidia. BofA Securities, Piper Sandler, Wedbush, and more have reiterated Buy-equivalent ratings recently.
Institutional investors hold 67% of shares. Vanguard, Blackrock, and State Street have notable stakes. More than 23 billion shares, or a little over 1% of the float, are held short. And note that CEO Huang has been selling shares throughout the summer, including 480,000 so far this month.
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