3 Reasons to Buy Nvidia Stock Right Now (and 1 Reason to Sell)
If you want to bet on generative artificial intelligence (AI), there is still no better pick than Nvidia (NASDAQ: NVDA). The company dominates the market for cutting-edge AI data center chips. And unsurprisingly, shares have risen by a whopping 206% over the last 12 months alone. But can the bull run continue? Let's look at three reasons to continue buying Nvidia stock and one reason why it might be time to sell.
While Nvidia's parabolic stock price surge may look like a bubble, it isn't. The rally is justified by equally impressive operational results. Fourth-quarter revenue surged 265% year over year to a record of $22.1 billion, driven by sales of cutting-edge AI hardware. Profitability is also exploding, with net income jumping almost ninefold to $12.3 billion.
Nvidia is enjoying a windfall from selling graphics processing units (GPUs) like the h200, which data center clients use to train and run their AI algorithms. This hardware is remarkably expensive, with the h100 costing as much as $30,000 per chip. The strong demand and pricing power allowed Nvidia to boast a software-like gross margin of 76% -- up from 63.3% in the prior-year period.
Source Fool.com
