In late November 2024, there was a surprising turn in the stock market for Nvidia (NASDAQ: NVDA), a leading semiconductor company. Despite releasing a strong quarterly report, the company's shares began to drop significantly.
Nvidia (NVDA -1.15%) is the top provider of graphics processing units (GPUs) for data centers worldwide. The need for these chips, which are essential for creating artificial intelligence (AI), is much higher than the available supply, and this situation is expected to persist for a while.
NVIDIA's market value has exceeded that of Apple and Microsoft, yet I believe there is still room for growth, estimating its share price at $189, which is a 42% increase. The company's strong financial results are fueled by a surge in GPU demand for AI, leading to impressive revenue and profit growth, along with smart share buybacks. Additionally, NVIDIA's platform approach, featuring CUDA and AI data centers, establishes high switching costs and fosters long-term partnerships, which helps maintain demand and a competitive edge.
CleanSpark is a bitcoin mining company that hasn't appreciated at the rate of other bitcoin or crypto-related stocks in the short term, such as MicroStrategy Inc. or Coinbase. The % short float for CleanSpark is at 31% of their shares outstanding. Dilution, combined with this excessive shorting, has spooked retail investors. A major catalyst for CleanSpark will be their guidance for Q4 earnings as they have been HODLing a significant number of bitcoins where the appreciation in price will eventually show.
Nvidia (NVDA -1.15%) has just announced an impressive financial quarter. The company had previously estimated that its revenue for the third quarter of fiscal 2025 would be about $32.5 billion, but it actually achieved record sales of $35.1 billion for the quarter ending on October 27.
Coinbase Global (COIN) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.
Coinbase Global (COIN) has been upgraded to a Zacks Rank #2 (Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.
Nvidia (NASDAQ: NVDA) is seen by many as one of the most successful companies in the stock market in recent years, and this is well-deserved. However, it is getting more difficult for the company to satisfy its investors. After Nvidia's Q3 FY2025 earnings call on November 20, where they reported strong results, the share price has actually fallen.
Nvidia Corporation has reported significant growth, with a 94% increase in revenue for Q3 compared to last year, largely due to strong data center sales, even though their share prices have recently dropped. The company's high forward P/E ratio of 46.33x indicates that some adjustments may be necessary, as it is higher than most of its MAG-7 competitors. The recent decline in share prices to the mid-130s could present a good buying opportunity, as support near the 50-day EMA suggests that the potential for gains is greater than the risks of further losses.
The need for AI chips, especially the high-performance GPUs from Nvidia that are used for training advanced AI models, seems to be endless. In the third quarter, Nvidia's data center division made over $30 billion in revenue, which is almost ten times more than it was two years ago.