NVDA

NVIDIA Corporation

154.34
USD
-3.43%
154.34
USD
-3.43%
151.70 346.47
52 weeks
52 weeks

Mkt Cap 399.55B

Shares Out 2.50B

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Nasdaq Bear Market: 1 Stock-Split Stock to Buy Now and Hold Forever

It seems that many of the most-popular stocks among investors have been jumping aboard the stock-split bandwagon, but the historic volatility that is currently plaguing Wall Street has taken center stage. The S&P 500 and the Nasdaq Composite have both languished in correction, while the tech-heavy Nasdaq has plunged into bear-market territory, currently down 23% from its November high. This is creating some compelling opportunities. Nvidia (NASDAQ: NVDA) enacted a 4-for-1 stock split less than one year ago, after years of robust growth had driven shares out of reach of many retail investors. However, the bear market has weighed on the chipmaker, driving its stock down more than 40%, even as the company generated record results. One for the books To understand the magnitude of the opportunity, investors should first look at Nvidia's recent financial performance. In fiscal 2022 (which ended Jan. 30), Nvidia generated revenue of nearly $27 billion, up 61% year over year, while its earnings per share (EPS) of $3.85 soared 123%. But that's only part of the story. In addition to the record fiscal-year results, Nvidia generated record-breaking fourth-quarter results in its gaming, data center, and professional visualization segments. This robust performance was fueled by strong and continuing demand for its graphics processing units (GPUs), which are the top choice of diehard and casual gamers alike, driving its gaming revenue up by 61% last year. While that would be reason enough to be bullish on Nvidia's growth prospects, that's just the beginning. Head in the clouds Several years ago, the semiconductor maker saw the writing on the wall and focused its efforts on creating processors for cloud computing and data centers. The parallel processing capability of Nvidia's GPUs -- which processes a multitude of complex mathematical calculations simultaneously -- also made it uniquely suited to handle the lightning-fast movement of data through the ether, resulting in quicker response times for users. Don't take my word for it. Amazon Web Services (AWS), Alphabet's Google Cloud, and Microsoft Azure all trust their processing to Nvidia, as do Alibaba Cloud, IBM Cloud, and Oracle Cloud -- and that's just the big dogs. Many other cloud and data center providers rely on Nvidia. Broad adoption by cloud platforms big and small pushed the company's data center revenue up by 58% in fiscal 2022. More where that came from Management expects the company's robust growth to continue. Nvidia is guiding for fiscal 2023 first-quarter revenue of $8.1 billion, up 43% year over year at the midpoint of its guidance and up 6% sequentially. The company also expects to expand its already juicy gross profit margin by roughly 50 basis points. It's easy to understand why. The gaming, cloud computing, and data center markets are all growing by leaps and bounds. All told, management estimates Nvidia's total addressable market will grow to $250 billion by 2023, suggesting the company has just scratched the surface of a large and growing opportunity -- particularly in light of its fiscal 2022 revenue of just $26.9 billion. As the premiere provider of chips used by gamers, cloud aficionados, and data centers alike, Nvidia is well positioned to ride these trends higher. Given its industry-leading position, strong secular tailwinds, and massive addressable market, Nvidia is the clear choice for a stock-split stock to buy now -- at a discount -- and hold forever. 10 stocks we like better than Nvidia When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Nvidia wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of April 7, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Danny Vena has positions in Alphabet (A shares), Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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