Should Investors Buy Nvidia Stock on a Dip?
Nvidia Corporation (Nasdaq: NVDA) has been a great investment for individual and institutional investors alike over its lifetime due to exceptional returns. It is one of the largest companies in computer technology and a leader in graphical processors, chip manufacturing, and artificial intelligence (AI) technology.
While the stock has seen significant gains over the years, the share price has seen a significant dip over the past couple of months due to COVID-19-related market uncertainty. Therefore, this has left investors debating whether they should buy NVDA on its current dip. In this article, we will discuss the reasons why investors should consider buying Nvidia stock on this dip and why now may be the best time to do so.
What to Consider When Buying Nvidia Stock?
When contemplating whether to buy Nvidia stock on a dip, there are several considerations investors should weigh, such as:
● Track Record: Nvidia is one of the most successful high-tech companies in the world and has a history of delivering above-average returns. Over the past five years, shares have nearly tripled in price, showing extreme performance compared to other stocks.
● Strong Fundamentals & Financials: Nvidia possesses some of the strongest fundamentals and financials among tech companies, with net income increasing from USD$1.6billion in 2018 to USD$3.08billion in 2019, a 16% increase year-on-year.
● Market Vista: Nvidia’s strength as a leader in chip manufacturing, gaming, and AI technology gives it the potential to capitalize on multiple markets, further driving growth and providing stability when markets dip.
● Competitive Advantages: Nvidia’s core technology, chip manufacturing, and gaming platforms are highly sought-after across various industries such as automotive and gaming, giving them an edge over competitors.
Why Should Investors Buy Nvidia Stock Now?
With Nvidia’s strong fundamentals, financials, potential market vistas, and competitive advantages, now may be the best time for investors to buy the stock. Here are some of the reasons why investors should consider buying the dip in Nvidia’s stock:
● Record Low Prices: The current dip in Nvidia’s share price has made the stock historically cheap, making it a great opportunity to buy in before the stock inevitably rebounds and prices increase.
● Acquisition Possibilities: With Nvidia trading at an all-time low, there is the potential for the company to be acquired by another large tech giant such as Apple or Microsoft. Given the premium Apple has historically paid for acquisitions, an acquisition of Nvidia could signal a significant stock increase.
● Increased Demand, New Deals: As a leader in the semiconductor and gaming industry, Nvidia has the chance to capitalize on the increased demand for new technologies in multiple industries related to the work from home trend, including 5G and automotive technologies. Additionally, new deals and contracts with different industries could significantly increase revenue, further driving up share prices.
With Nvidia’s strong fundamentals, potential for acquisitions, and new deals across various industries, now may be the most opportune time for investors to buy its stock on a dip. The record-low prices of the stock create an opportunity for investors to invest at a significantly lower cost compared to its historic pricing. Additionally, its strong revenues, potential acquisitions, and existing competitive advantages create the ideal environment for growth as the stock rebounds. Investors should heed the reasons above when considering whether to buy Nvidia stock on this dip.