Nvidia shares: Price analysis before buying or selling

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ISIN code: US67066G1040

Ticker: NASDAQ: NVDA

Index or market: Nasdaq

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Elements to consider before selling or buying Nvidia shares

Analysis N°1

New product launches that can enable the company to attract new prospects or retain existing customers, not to mention the revenues generated by the exploitation of patents.

Analysis N°2

The new mobile technology sector, including Tegra mobile chips perfectly adapted to Android systems, is currently growing steadily, which could finally enable Nvidia to take a position in this market.

Analysis N°3

Finally, we will closely monitor the company's various acquisitions in strategic areas that could enable it to increase its market share or develop a broader range of products or even lower its production costs.

Analysis N°4

There is also increasingly aggressive competition from the major IT brands, which could lead to a further loss of market share.

Analysis N°5

Global economic health, which is an important marker for the group's activities, will also be monitored. Indeed, the current economic slowdown and financial fluctuations are weighing heavily on Nvidia's sales.

Analysis N°6

Finally, we will keep an eye on the current phenomenon of contraction in the final market and its evolution.

Analysis before buying or selling Nvidia shares

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General presentation of Nvidia

A good knowledge of the NVidia company and its activities or main sources of income is of course essential if you want to make a good analysis before buying or selling this stock. That is why we are now offering you a complete presentation of this group with details of its activities and the breakdown of its turnover.

The NVidia Corporation group is an American company which is active in computer components. More precisely, NVidia is currently the world leader in the design, development and sale of programmable graphics processors. It also develops associated software under the ForceWear brand.

To better understand the NVidia Group's activities, they can be divided into different business segments according to the share of revenue they generate, as follows:

Computer processors account for the bulk of the company's revenue with 86.7% of the turnover. This includes GeForce, Personal Cinema and Quadro graphics and media processors, nForce storage and security processors for computers, servers and workstations, and other products.
Next are mobile processors, which generate 13.3% of NVidia's revenue, including processors that integrate image capture, video playback, and gaming functions for cell phones, game consoles, and tablets. These processors are marketed under the GeForce brand.

As far as the distribution of sales by sector is concerned, 50.5% of sales are in games, 27.3% in data storage, 11.1% in professional visualization, 6.4% in automotive and 4.7% in other sectors.

The geographical breakdown shows us that 8.1% of sales are generated in the United States, 27.7% in Taiwan, 25% in China, 24.6% in Asia Pacific, 9.1% in Europe and 5.5% in the rest of the world.

Photo credits: ©unitysphere/123RF.COM

The major competitors of Nvidia

A good knowledge of the competitive environment of the NVidia group is of course essential if you want to set up good analyses before buying or selling this stock. Here is a quick presentation of its current main opponents.

AMD

The Advanced Micro Devices group is an American manufacturer of semiconductors, microprocessors and graphics cards. It currently ranks among the top 10 semiconductor manufacturers in the world and is a leading producer and supplier of microprocessors for x86-based computers.

Intel Corporation

Another competitor of NVidia is the American company Intel Corporation, which is also the world's largest semiconductor manufacturer in terms of turnover. It specialises in the manufacture of microprocessors, motherboards, flash memory and graphics processors. The group is listed on the Nasdaq 100 stock index and has one of the largest market capitalisations in this sector.

Infineon

This other group is a spin-off of Siemens AG and is also specialised in the semiconductor segment. It was listed on the stock exchange one year after its creation in 2000 and is now the world market leader in smart card components. Infineon is one of the largest chip manufacturers in the world and ranks sixth in this ranking.

STMicroelectronics

This company, also known as ST, is a Franco-Italian multinational with its operational headquarters near Geneva in Switzerland. The group designs, produces and markets electronic chips or semiconductors and is one of the world's leading players in the production of this type of product. It re-entered the CAC 40 stock index in 2017 after exiting in 2005.

Qualcomm

The competition from the Qualcomm Group, an American company specialising in the mobile technology sector, will also be followed with interest. The company specialises in the design and implementation of telecommunications solutions. Qualcomm has become one of the world's leading companies in the design and marketing of mobile phone processors. Qualcomm is also a fabless company and is also popular because it developed CDMA technology.

Samsung Electronics

Another major competitor to NVidia is Samsung Electronics, which is a Korean electronics manufacturing company and a wholly owned subsidiary of the Samsung Group. The company currently employs over 308,000 people and is the thirteenth largest company in the world according to the Forbes Global 2000 ranking. But Samsung Electronics is also the second largest company in the global high-tech industry after Apple in terms of revenue. The Samsung Group has long been a major manufacturer of electronic components such as lithium-ion batteries, semiconductors, integrated circuits, flash memory and hard disks for customers such as Apple, Sony, HTC and Nokia. The group has recently diversified into electronics.

The major partners of Nvidia

Nvidia has developed major strategic partnerships that we detail as follows with some explanations on its recent collaborations.

Ubisoft

In 2013 NVidia became a partner of the Ubisoft Group to integrate its technological innovations in some of its video games under production.

Tesla Motors

In 2016, Tesla Motors called upon NVidia to equip its onboard digital dashboards and vehicle tactile screens with this brand’s most powerful graphics cards and processors.

Bosch

In 2017 NVidia became a partner of Bosch for the integration of its Drive PX platform and the development of its AI for autonomous vehicles.

Volvo

Still in 2017 NVidia signed a partnership with the Volvo automobile constructor aimed at developing a system of autonomous driving. The first autonomous vehicles should enter circulation in 2021.

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The factors in favour of a rise in the Nvidia share price:

Investors who take a long position in Nvidia's share price are of course based on their belief that the company has good prospects for the future. But to be convinced of this, it is of course necessary to compare the analyses and weaknesses of this company in order to determine its growth capacities as accurately as possible. We will therefore first discuss here the strengths of this company and its main strengths.

First of all, the Nvidia group's main asset remains its positioning on the global market. Indeed, the company has a very strong presence in its sector of activity in many countries and also enjoys excellent popularity with the general public and with the IT industries that are part of its customers.

The Nvidia group also benefits from a strong market capacity. It is expanding its activities internationally thanks to the presence of offices in no less than 14 countries. Thus, it can effectively protect itself from local economic crises by affecting various economies with different profiles. In particular, the group has performed very well in new markets thanks to its expertise, which enables it to penetrate these markets and establish a long-term presence. This international expansion has helped the group to generate new sources of revenue and avoid the cyclical aspect of the markets in which it operates.

To increase its sales and improve its results, the Nvidia group can also count on a strong reseller community. It has thus developed a real culture among its main distributors and resellers, who play an important role in promoting its products and invest in training salespeople in order to maximize the sale of these products.

Nvidia also has a very wide range of products in the graphic units sector. Thus, it offers products of different levels and prices, which allows it to reach the entire market where some of its competitors are specialized in a specific range. Nvidia also operates several brands that are very popular, such as GeForce, Quadro, Tagra, Tesla and nForce.

The Nvidia group's ability to innovate is also a definite advantage. Working in a particularly technological field, he can rely on his research and development to invent new products that are more efficient or meet new needs. Nvidia is also at the head of a very large patent portfolio with more than 2,300 patents to date.

Finally, we can appreciate the very good financial situation of this company, which has been marked by an increase in its performance in recent years. These figures are of course highly appreciated by investors and shareholders.

The factors in favour of a drop in the Nvidia share price:

We have just reviewed the many strengths of the Nvidia group that should enable it to ensure its future profitability. But before taking a long-term buying position with this action, through CFDs for example, you must also know the possible obstacles to this development and therefore the weaknesses of this company. Here is a summary of the defects of this value and the weak points of the company Nvidia.

First, due to the advent of mobile devices, the group has recently experienced a decline in sales of its products for computers. Unlike some of its competitors who have anticipated this change in consumers, Nvidia has not yet been able to position itself successfully in this new market.

The group is also affected by very strong competition from other large multinational companies. As a result, it finds itself limited in its market share gains. It is also necessary to take into account Chinese competition, which is increasingly strong in the specific field of semiconductors and is driving prices down, thus adding additional pressure.

Among the most threatening competitors for Nvidia, new entrants can also be found in very specific segments that represent niche categories. The group has thus lost some of its market share because it has not been able to adapt to this new competition.

It can also be noted that the Nvidia group is unable to correctly anticipate product demand, which leads to a high rate of missed opportunities compared to its competitors. The company has thus failed to demonstrate its ability to adapt its production to the needs of its main customers, which has also led to a significant increase in stocks and therefore substantial losses.

Finally, it is also regrettable that the Nvidia group remains focused on its core business and enjoys only limited success in the other product categories. Although Nvidia is one of the leading companies in its sector, it faces significant challenges in diversifying into other types of products while maintaining its current corporate culture. In addition, the lack of choice in the range of products sold by Nvidia could lead to the loss of some of its customers who will prefer a company that can meet all their needs with a single, more complete offer.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

How often are the results of the NVidia Group published?

The American NVidia Group, as a listed company, is obliged to publish its profit and loss accounts on a regular basis. This means that you will of course be able to follow the financial results of each financial year with data such as turnover or net profit, but also data concerning the quarterly results of this company, which are therefore published every three months. This data is very important and should be taken into account before buying or selling Nvidia shares. The financial data of the group is available for free online.

On which markets and indices can the NVidia share price be found?

NVidia is an American company listed on the stock exchange among the largest capitalizations in the country. As such, it is listed on the NASDAQ market of the NYSE, in real time and continuously. It is also important to note that NVidia is also part of the Nadsaq 100 American stock market index and is therefore among the 100 largest valuations of this exchange.

What is the legal status of NVidia?

It is also interesting to know the status of the company NVidia before starting to trade on the stock market. Indeed, the NVidia group is actually a 'fabless' company. This means that the group designs its own chips in research centers dedicated to R&D, but that it works through different subcontractors for the production of these chips.

Where and how can I buy or sell Nvidia shares?

Nvidia shares are listed on the NASDAQ exchange in the United States and can be bought or sold on many online trading platforms. To buy or sell Nvidia shares, you must first choose an online trading platform and open a trading account. It is important to choose a regulated and reliable platform with reasonable fees and a good reputation for security and customer service. Once you have opened a trading account, you can place an order to buy or sell Nvidia shares. You will need the stock symbol for the stock, which is 'NVDA' on the NASDAQ. You can place limit orders to buy or sell, which allow you to set a specific price for the stock, or market orders, which execute the order at the best price available in the market at the time of the trade. It is important to research Nvidia stock before you buy or sell it, looking at financial results, market trends, recent company developments and analysis from stock market experts.

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