The Future Is Arriving... Big Gains Are Happening Now
You can be in the right place at the right time for good things to happen by coincidence.
Or you can plan to be in position to win.
Today, I’m going to tell you how to put yourself in a winning position. With one of my favorite breakout companies of the last year.
Old Dog, New Chips
If you’ve tracked tech stocks at all in the last two years, Nvidia (NASDAQ: NVDA) might sound familiar.
Nvidia got its start popularizing the graphics processing unit (GPU).
This was a perfect place to be back in the 1990s, as the PC gaming market was starting to take off with new immersive games that demanded greater graphics-processing power than was normally available.
In this decade, Nvidia has leveraged that original technology in new and unique ways.
GPUs are no longer used for simply rendering incredible visual experiences.
They have become a general-purpose technology. And they’ve become the driving technology across the highest-growth areas in technology.
Virtual reality. Autonomous driving cars. Artificial intelligence.
Nvidia is a huge player in all of these areas. And that growth has the company reporting one record quarter after the other. “Beat and raise” has become common for this tech company.
The company is up 650% since 2015.
And they’ve continued their meteoric rise into this quarter. Nvidia’s reported 79 cents in earnings per share, beating the Street’s expectation of 66 cents. And revenues came in at $1.94 billion versus an expected $1.91 billion.
This is a record first quarter for Nvidia. It isn’t a record quarter overall, however, because there is a yearly cyclicality to this company’s business.
Revenues tend to rise toward the end of the year as people buy computers and gadgets that use Nvidia equipment.
And so do share prices, by the way. My colleague the brilliant technical analyst Jonas Elmerraji, editor of Agora Financial’s Kinetic Profits, has created an algorithmic tool that can be used to see the average return of a stock depending on the time of the year that you buy it.
I used this tool and 18 years’ worth of chart data on NVDA.
The pattern could not be clearer. It’s a great stock to hold in the second half of the year:
While not an overall record quarter, the first quarter of this year was still really impressive — a nearly 50% increase in revenue over last year’s first quarter, with earnings per share up 126%.
In Nvidia’s core business, gaming, it produced over $1 billion in revenue for the quarter — versus $687 million a year ago.
New Trends, New Opportunities
The company’s emerging opportunities in data centers and automotive applications, however, are the real bright spots.
Nvidia’s data center segment turned in $409 million versus $143 million a year ago — and $297 million just last quarter.
The company also broke out its automotive segment revenues, which contributed $140 million this quarter — a sizeable increase over last year’s quarter, which turned in $113 and a strong beat over the previous quarter’s $128 million.
In other words, Nvidia broke all-time records in both of its high-growth areas.
In Nvidia’s core business, I expect we will see continued strength. Virtual reality is going to drive demand for Nvidia’s technology.
VR requires high-powered graphics processing to create an immersive visual experience. It requires high resolutions, low lag and high frame rates. Without this, a pleasant VR experience isn’t even possible.
Furthermore, gamers are transitioning over to 4K-resolution monitors. With far more pixels to drive, these require more powerful cards than the usual 1080p HD displays.
And don’t forget, we are in the early innings of an exponential growth trend in AI and autonomous driving tech.
Weighing all these factors together, it becomes clear Nvidia has placed itself in exactly the right place for big growth. This thesis is confirmed by my colleague’s trading algorithm, as you saw above.
I’m confident even bigger gains could be ahead for Nvidia.
To a bright future,