Nvidia Stock Forecast: Reasons Why it Will Continue to Soar Long-term

This Nvidia stock forecast article was written by Isaac Rothstein – Analyst at I Know First.

Summary

  • NVIDIA has significantly outperformed the S&P 500 over the last five years.
  • Quarterly revenue from gaming has increased by 27% year over year
  • NVDA is expanding its presence in growing markets.
  • Revenue generated from data centers has grown by 80% this year.
  • NVDA stock price continues to rally beyond its previous record high in 2018.

Nvidia Stock Performance

Over the last five years, Nvidia’s stock (NASDAQ: NVDA) has grown 1,580% and has risen by 80% in the past three months. Although this growth may seem too great to continue, NVDA still has much room for further expansion. Over the last five years, NVDA has significantly outperformed other technology-based companies such as NFLX (385% growth) and FB (195% growth). Nvidia stock forecast remains bullish; I expect them to further extend their upward trend.

History of Gaming

Source: Statista

Until recently, NVDA generated most of its revenue through its Graphic Processing Units (GPUs) and gaming sales. Since 2013 they have increased their market share in the growing market of GPUs. Although their market share has gradually increased, their revenue generated from the gaming industry has been relatively stable. While they now seem to be maturing in this industry, rather than growing at their previous pace, the Nvidia GE Force is widely regarded as the best gaming GPU on the market.

Source: Statista

Although Nvidia and AMD have substantially less market share for GPU sales than Intel, they have begun to substantially close the gap since the fourth quarter of 2018 – as Intel’s market share has decreased by nearly 10% in the last year. Intel’smarket share is now the lowest it has been since 2013. This has allowed NVDA to gain 5.5% market share of this growing industry in 2019.

While every market generated more revenue in the first quarter of this year compared to last year, Nvidia has begun to expand exponentially in the data center market. Due to the rapid growth in this industry, Nvidia’s quarterly revenue generated from their expanding markets (Data center, Professional Visualization, Automotive, other) provided more than the gaming industry for the first time since the first quarter of the 2020 fiscal year.

Datacenter and Coronavirus

Nvidia Stock Forecast
Source: Statista

In the first quarter of their 2021 fiscal year, Nvidia’s revenue from the data center market almost matched gaming revenue for the first time. Their first-quarter revenue generated from the data center market has grown by 80% from just a year prior. This major increase is due to their acquisition of Mellanox Technologies along with the effects of the Coronavirus. Initially announced in 2019, the acquisition of Mellanox Technologies – a data center and cloud computing company – has substantially increased Nvidia’s revenue. In addition, Nvidia announced the release of their groundbreaking Nvidia Ampere to further enhance the data center market with their AI technology.

Source: Nvidia

The timing of the Mellanox acquisition and the release of the Nvidia Ampere have proved to benefit Nvidia immensely. Although the Coronavirus has hurt many industries, it accelerated the growth of data centers. Due to many Coronavirus related restrictions, many employers across the world are now relying on data centers to continue to run their business although their employees may be unable to work in their offices. Many medical experts predict that there will be a second wave of the virus that will cause many employees to once again work from outside of the office. If this were to occur, data centers would once again be relied on and the 2020 release of Nvidia Ampere may be crucial. The Coronavirus has opened the eyes of many companies, showing them that they do not need to have employees come to the office to be productive, due to data centers. This market has been and will continue to grow, but the Coronavirus triggered this market’s growth to accelerate exceptionally. With the tremendous growth in demand for data centers, I expect that in the upcoming quarters Nvidia will begin to get more revenue from the data center market than the gaming industry. It would not be surprising if by the fourth quarter of this fiscal year, NVDA close to doubles the revenue they generated during the same quarter of the previous year – due to the coronavirus’ positive impact on both the gaming and data center industries.

What This Means for the Future

Nvidia Stock Forecast
Source: Statista

Nvidia is no longer just a gaming company. NVDA may begin to generate more revenue from their growing data center market than from gaming for the first time. This is not due to a decline in gaming sales, but because of the higher demand for data centers. In addition to higher data center revenue, NVDA is also working towards establishing themselves in other industries, such as the automotive industry. They are working with multiple automotive companies, most notably Volvo, to create a self-driving car. These companies are currently working on a project to place 100 test vehicles on the road in Sweden. In addition, they are also striving towards automating the trucking and delivery industry. Nvidia’s outreach to various industries is helping them become a more diversified company and give them the potential to further extend their bull run for the remainder of 2020 and into 2021.

2020 Nividia Stock Forecast and Outlook

Nvidia Stock Forecast
Source: Tipranks

With Nvidia’s rapid expansion in data center revenue, while still gaining market share in GPU sales, I continue to be very bullish on NVDA. If a second wave of Coronavirus were to come, as experts warn, the data center market would once again expand quickly and sales from the Nvidia Ampere will drastically increase their data center revenue. Although NVDA may not grow at the rate it has been over the last few years, the breakthroughs they are building in their emerging markets make them a more well-rounded company with the potential to reach $400 and beyond.

As of June 21, 2020, Nvidia stock forecast is showing an ultra-bullish 1-year score of 510.77 with a predictability score of 0.78. A high signal score of 510.77 indicates that we expect further positive returns for NVDA. The predictability score ranges from -1 to 1 to demonstrate how our prediction correlates with the actual stock’s movements. NVDA’s 0.78 is extremely high and shows that this stock has a relatively high level of predictability. Barring anything out of the ordinary, we expect NVDA to continue its tremendous bull run through 2020 and into 2021.

Nvidia Stock Forecast

How to further interpret this diagram

Past Success with Nvidia Stock Forecast

On June 5th, 2019, the I Know First algorithm resulted in a bullish 1-year Nvidia stock forecast. At the time of the forecast, Nvidia’s stock price was $143. Just one year later NVDA stock had a value of $356.80, growing by 149.51%. The algorithm was successfully able to predict the jump NVDA made in 2019 and 2020.

Here at I Know First, our stock market AI has modeled and predicted assets price movement worldwide for short-term and long-term time horizons, ranging from 3 days to a year. Since 2011, we have been providing stock market predictions, for example aggressive stocks, S&P 500, forex predictions as well as Apple stock predictions. Today, we are producing artificial intelligence stock prediction for over 10,500 assets, including commodity forecasts and gold predictions. These forecasts generated by our quant trading tool are used by institutional clients, as well as private investors and traders to identify the best investment opportunities in the market.

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Please note-for trading decisions use the most recent forecast