Nvidia, also known right now as “the most important stock on the planet,” delivered record-breaking earnings on Feb. 21, with revenue rising to an eye-popping $22.1 billion, up 265% from a year ago according to the earnings report, thanks to its artificial intelligence (AI) business.
This is what some analysts, such as Wedbush Securities’ Dan Ives, deemed it “the biggest moment for the market and tech sector in many years,” and a “game-changing moment for the tech bulls.”
To put this into perspective, as of Feb. 13, shares of Nvidia were up 17,044% in the past 10 years, according to an Investor’s Business Daily analysis.
In turn, that means that if you had invested $10,000 in the stock 10 years ago, your investment would now be worth an eye-popping $1.7 million.
“That’s more than you’ve made on any S&P 500 stock in that time. The S&P 500 itself is only up 176% in that time, only turning your $10,000 investment to $27,604. You’d be more than $1.6 million richer by going with Nvidia over just the S&P 500,” according to the analysis.
However, some experts said that while data and statistics regarding what stocks have returned the most over elapsed periods are interesting, they are “materially insignificant.”
“Hindsight is always 20-20,” said Peter C. Earle, senior economist for the American Institute for Economic Research. He added that 10 years ago, there were undoubtedly as many reasons not to invest in Nvidia as there were reasons to put money into it.
Earle argued that when Nvidia went public in 1999 it was a promising firm, but its headline business was supporting the graphics of video games becoming increasingly sophisticated.
And from 2004 to 2014 there were plenty more reasons to invest in Amazon for instance, than in Nvidia, since over that period, Amazon’s stock appreciated at an average rate of 21% per year while Nvidia’s was averaging just over 10% per year, Earle added.
“Over the next five years Nvidia’s stock rocketed ahead of Amazon’s, even before AI became the focus of so much anticipated growth,” continued Earle. “My point is only that explosive asset price appreciation of this sort is next to impossible to see in advance. Fortunately, even though most of us didn’t own Nvidia stock (other than indirectly in our 401Ks), we will all benefit hugely from the innovation its products are making possible.”
Yet, the stock’s skyrocketing ascent doesn’t seem like it will be stopping anytime soon — as shown in the company’s financial forecast, which predicts revenue to be $24 billion for the first quarter of fiscal 2025.
“We guide one quarter at a time. But fundamentally, the conditions are excellent for continued growth calendar ’24, to calendar ’25 and beyond,” said Jensen Huang, Nvidia founder and CEO, according to a Feb. 21 earnings call transcript.
“And let me tell you why? We’re at the beginning of two industry-wide transitions.”
Following the earnings release, many analysts significantly raised their price target for the stock. For instance, Angelo Zino, CFA and senior industry analyst for CFRA Research, said in a research note that the company lifted its 12-month target to $840 from $700, as it sees “a slew of growth drivers that will support demand in CY 24/CY 25 and beyond.”
And as Joe Camberato, CEO of National Business Capital, noted, the company’s quarterly sales now make up a whopping 90% of last year’s revenue.
“That’s not just impressive; it’s a clear sign of the AI frenzy we’re witnessing. We’re on the brink of a tech revolution, and Nvidia’s set to be a key player,” he added.
Yet, some experts are against putting all your eggs in the same basket, warning “[Ten thousand dollars] invested in any stock is like throwing darts at the board and saying you have the crystal ball in forecasting what to expect with any one company.”
Instead, try other options to take advantage of Nvidia’s explosive growth such as investing via exchange-traded funds (ETFs).
“Most regular traders and investors are not that savvy nor do they have the patience or experience to be a top stock picker,” explained Sean Kozak, CEO of Neurostreet. “This is where having a dual tech strategy comes in. Using tech ETFs would be a better replacement as it allows you to not only play the bull market but also the bear market.”
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
