They need the fastest, most reliable processors available. That's why Microsoft's Azure Cloud, Google Cloud, and Amazon's AWS rely on those very same GPUs to perform data operations. That accounts for 36% of total sales for the company. In the first quarter of 2021, Nvidia generated a record high data center revenue of $2.05 billion, up 79% year over year. This pushed expectations for the global data center market to hit $117.82 billion by 2028 - a compound annual growth rate of 13.3% from 2021 to 2028.Īnd Nvidia's GPUs are at the heart of these data centers. COVID-19 fast-tracked demand for data centers due to the increased adoption of cloud services.
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Think of them as the brain of cloud services that keeps software and services running seamlessly. That's up from $270 billion in 2020.īut cloud-based software is nothing without the data centers. According to Gartner Inc., a tech research and advisory firm, spending on public cloud services is expected to grow 23.1% in 2021 to total $332.3 billion. If any good has come out of the pandemic, it's that we've seen the potential of cloud-based software and computing with the work-from-home movement. Why Nvidia's Cloud-Based Software Will Dominate This has allowed it to develop an expanding suite of cloud-based software.
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Not only is Nvidia able to create powerful graphics processing units (GPUs) for the gaming and professional markets, as well as system on a chip (SoC) units for mobile computing and automotive market, but the company also pours a large amount of resources into research and development. Nvidia has an edge as it moves into cloud software and services.
And that growth could see Nvidia stock jump 190% higher by 2025. Nvidia is a growing tech company that could one day rival tech giants like Inc. That's why our Nvidia stock forecast shows shares nearly tripling from here. Fortunately for investors, it is much more than a semiconductor company.
If Nvidia were just a semiconductor manufacturer, the stock would be overpriced. Save my name, email, and website in this browser for the next time I comment. Sign me up for the Money Morning newsletter Your email address will not be published. Or to contact Money Morning Customer Service, click here. When investing, your capital is at risk.Comment on This Story Click here to cancel reply. In light of the fact that its GPU market share is so dominant and demand in the tech sector is growing, the company is well-positioned to meet the estimated $350 per share by the end of the year.ĭisclaimer: The content on this site should not be considered investment advice. With demand for gaming, GPUs is projected to continue expanding in 2022 thus, the rising input costs and a scarcity in the supply chain will result in a rise in the price of GPUs.
Video gaming and data center graphics processing unit (GPU) market dominance, in particular, should help the firm maintain its exceptional growth and beat the market’s expectations. The firm is also expected to conclude the fiscal year with revenue 60% higher and profits per share that is 74% larger than the previous year, demonstrating that its growth is robust enough to justify the high multiples at which it is now trading. With sales likely to reach $7.4 billion, the chipmaker is poised to deliver a strong report to investors. With that being said, NVDA has been a strong performer over the last couple of years, growing more than 230% as a result of the company’s strong rise in profits and sales during that period. The hardware manufacturer presently trades at 74 times trailing profits, 46 times prospective earnings, and 25 times sales, which is rather pricey when compared to the Nasdaq 100 index, which has a price-to-earnings ratio of 34. The company’s value is one of the most important factors that investors should examine when deciding whether to sell their Nvidia stock. Source: īased on the price predictions of the 25 TipRanks experts’ stock recommendations for NVDA over the past three months, 23 advocate that investors should “ Buy,” while two experts recommend that investors should “ Hold,”, interestingly none advise to “ Sell.”Ĭonsequently, the average rating for Nvidia stock is a “ Strong Buy,” with a potential upside of 46.57% over the next 12 months.
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