When it comes to investing in NVIDIA Corporation stocks, investors need to be aware of how the company’s actions affect the stock’s performance. Recently, the release of NVIDIA’s new RTX 30-series of graphics cards has been driving investors to accumulate NVDA shares before the stock’s next launch.
In spite of the company’s positive outlook and the stock’s impressive performance over the past year, investors should still exercise caution. While the company’s R&D and marketing efforts seem to be doing well, there are some weaknesses that could affect the stock’s performance in the future.
To begin with, NVIDIA faces strong competition in the market from companies like Intel and AMD. Intel’s Xe-branded graphics cards and AMD’s Ryzen processors offer NVIDIA’s products some formidable competition, potentially eating away at some of its market share.
Another potential concern facing NVIDIA is its reliance on the gaming industry. While gaming is certainly a huge and profitable sector, the industry is still subject to cycles which can drastically affect the stock’s performance.
Lastly, NVIDIA’s stock is relatively expensive when compared to its peers. Although the company is growing rapidly, it can be argued that the stock price is unsustainable and could drop if investors begin to take profits or look for better opportunities.
In light of these weaknesses, investors should weigh the risk/reward of investing in NVIDIA stock before its next launch. Although the company is continuing to make significant progress in the gaming and data center spaces, the stock’s potential is far from guaranteed. As such, it’s important to assess whether the rewards are worth the risk of investing in NVIDIA before its next launch.
