Daily Brief - NVDA stock is skyrocketing. Again. (Nov 12, 2021)

You’ve heard the name. If you’re lucky, you’ve owned the stock. NVDA has been on a tear, and not just lately. The company has become synonymous with almost everything “buzzy” in the market: Cloud, Autonomous Vehicles, AI, gaming and of course … Metaverse.

What does it actually do?

Nvidia is primarily a maker of graphics processing units (GPUs). These computer chips were originally designed for use in gaming and film. However, and hence the buzz, they are increasingly used in high-performance computing applications such as running data centers and operating artificial intelligence (AI).

TOGGLE has been highlighting positive drivers in the stock for some time, ranging from both technical and fundamental ones. The AI news insights (in yellow) have been turning up bullish developments and reinforcing the rising-trend narrative.

The company is set to report quarterly earnings next week (Wednesday) and analysts are rushing to outdo each other on the forecasting front. Analysts led by Rick Schafer at Oppenheimer reiterated their Outperform rating on Nvidia stock and raised their target price on the shares by 49% to $350 from $235.

What - except rising prices - is making analysts so optimistic?

While supply constraints remain a source of anxiety for chip makers globally, Nvidia’s reliance on both Taiwan Semiconductor Manufacturing and Samsung diversifies its supply, and gives it a leg up at the time of an industry-wide shortage.