NVDA

NVIDIA Corporation

154.59
USD
-3.27%
154.59
USD
-3.27%
151.70 346.47
52 weeks
52 weeks

Mkt Cap 399.55B

Shares Out 2.50B

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What's Behind Nvidia Stock's 5x Rise Since Late 2018?

Nvidia Corporation (NASDAQ: NVDA) stock price rose 5x from $33 in 2018 end to around $167 currently, primarily due to favorable changes in its sales and P/S multiple. During this period, the company witnessed a strong 130% rise in revenues, and combined with a more than 80% rise in its P/S multiple, the company’s stock price has rallied despite a marginal rise in the outstanding share count. Further, over the same period, the S&P 500 returned around 60%, meaning that NVDA stock has managed to strongly beat the index since 2018-end. In our interactive dashboard, Why Nvidia Stock Moved: NVDA Stock Has Gained 400% Since 2018, we break down the factors behind this move. (A) NVDA’s Total Revenue has grown 130% from $11.7 billion in FY 2019 to $26.9 billion in FY 2022 NVDA’s total revenue initially dropped from $11.7 billion in FY ’19 to $10.9 billion in FY ’20, but demand has picked up since the pandemic and sales have risen strongly to $26.9 billion in FY ’22, and currently stand at the same level (NVDA’s fiscal year ends in January). Nvidia is a major player in the GPU market, with its sales being driven by gaming processors and data centers. Nvidia’s largest segment is the graphics segment, bringing in $15.9 billion as of FY ’22, making up around 59% of the company’s total sales. For additional details about NVDA’s revenues and comparison to peers, see Nvidia (NVDA) Revenue Comparison (B) Revenue per share (RPS) increased 124% from $4.81 in FY 2019 to $10.75 currently NVDA’s revenue rose from $11.7 billion in FY 2019 to $26.9 billion currently, while the outstanding share count rose from 2.4 billion in FY 2019 to around 2.5 billion currently. Due to this, RPS has jumped more than 2x from $4.81 in FY ’19 to $10.75 currently. (C) Price-To-Sales (P/S) multiple for NVDA rose strongly from 14.8x in 2019 to 52.1x by 2021 end, but has pulled back to 15.5x currently, still slightly higher than its 2019 level NVDA’s P/S multiple rose strongly to around 52.1x by late 2021, on the back of rising investor expectations surrounding increased demand for its graphic processors, leading to a rise in the company’s sales. However, due to the current geopolitical tensions and increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 15.5x. For additional details about the company stock returns and comparison to peers, see Nvidia (NVDA) Stock Return Comparison. What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016. [1] Month-to-date and year-to-date as of 5/23/2022 [2] Cumulative total returns since the end of 2016 The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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