Nvidia Stock: How will it perform in the short and long term?

Nvidia Stock

Nvidia stock, (Nasdaq: NVDA) is growing at a Rapid Pace, and it will continue to grow massively in the short term. The chipmaker recently surpassed competitor, Intel (Nasdaq: INTC), in its company’s market valuation. Now they are in front of the line of the chipmaking market. However, Advanced Micro Devices (NASDAQ: AMD) could be giving them a run for their money in the long term, especially in the gaming market.

What is driving Nivida Stock upward? Despite a global pandemic disrupting business around the globe, the stock has not seen a downfall but rather a PPS gain of $200, roughly 42% of its stock. When you look at their recent 6-month performance, you will see that while they had small dips, the overall price of the stock still skyrocketed. 

Nvidia’s stock Performance over the last 6 months. (Yahoo Finance).

Now, one big question remains: should you buy Nvidia stock.

The answer to this question is simply yes. Nivida is a massive growth stock for the short term. It could very well overperform market expectations. While individual analysts say, the chipmaker is currently overvalued. Other analysts say the stock will increase in revenue next fiscal year.

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Video games are on an upward trend, as multiple analysts predict. However, an industry on the rise may not take all of its current key players with it. Advanced Micro Devices, Nvidia’s competitor chipmaker, is much farther ahead in terms of development and the devices it is in, especially in the gaming industry. 

Not being on either side of the console war will come at a real competitive advantage to Nvidia

The Xbox Series X and the PlayStation 5 is going to come equipped with an AMD processor. Not being on either side of the console war will come at a real competitive advantage to Nvidia because it takes away a big chunk of the gaming market.

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 Nvidia will take a large portion of the PC market, where they can sell more individual products, but at the end of the day, AMD will overtake Nivida in the next few years, just because of the amount of Real Estate they own within gaming devices.

It might perform well in the near future, but not after.

Although Nvidia is moving into the cloud storage side of gaming, it will do well it might perform well in the near future, but not after. Because they currently have a hold on the gaming market, the stock will rise. Until February, when the first significant set of consoles have been shipped out and are in-use. At this point, the stock will peak, and it will be time to sell because, at that point is when AMD, will overtake Nvidia. 

On the other hand, Nvidia could be a massive growth stock over the long term. With plans to power the cloud gaming industry, Nvidia is playing chess while AMD is playing checkers. If they power the cloud gaming industry, that will lead to much larger contracts in the future. Instead of working on individual processing units, they could focus on the bigger picture. If companies decide to stay with Nvidia, that will prove to be massively successful for the chipmaker.

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Overall, Nvidia is a buy, but once the new consoles come out, it would be good to hedge it down a little bit and reinvest those earnings into AMD. Over the long term, you will have to follow our updates to find out what will happen.

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