This is a step-by-step stock review to answer the question, is Nvidia (NVDA) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Nvidia (NVDA) stock a good buy?
1. Nvidia Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem.
- Pioneered GPU Technology: Revolutionized computer graphics with the GeForce 256 in 1999, the world’s first GPU.
- Stock Market Debut: Went public in 1999, trading on NASDAQ under the ticker NVDA.
- Dominated Gaming: GeForce GPUs became the top choice for gamers worldwide.
- AI Revolution: Leveraged GPU technology for artificial intelligence, transforming industries from healthcare to automotive.
- Data Center Leadership: Expanded into data centers with powerful solutions for cloud computing and AI.
- Self-Driving Cars: Partnered with major car manufacturers to develop autonomous vehicle technology.
- Acquisitions: Acquired key companies like Mellanox Technologies and Arm Ltd., enhancing their technology portfolio.
- Supercomputing: Played a crucial role in building some of the world’s fastest supercomputers.
- Omniverse Platform: Launched a powerful simulation and collaboration platform for creators and developers.
- Sustainable Tech: Committed to sustainable practices, reducing carbon footprint through energy-efficient technology.
- Global Presence: Headquarters in Santa Clara, California, with offices worldwide.
Nvidia has continuously pushed the boundaries of innovation, making significant contributions to gaming, AI, and computing.
2. MOS (Margin of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: On Sale
- Score: 100
- MOS: 80%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Nvidia makes money:
- Graphics Cards: NVIDIA sells GPUs for gaming and professional use.
- Data Center Solutions: They provide GPUs and software for AI and data centers.
- Automotive: They develop technology for autonomous vehicles and in-car entertainment.
- Licensing: They license their technology to other companies.
- Software: They sell software for gaming, AI, and other applications.
- Professional Visualization: They offer high-end graphics solutions for industries like design and media.
- Gaming Consoles: They provide technology for gaming consoles.
- AI and Machine Learning: They offer hardware and software solutions for AI and machine learning.
- Arm Limited
- Mellanox Technologies
- Cumulus Networks
- DeepMap
- ARM Holdings (pending approval)
Here are some of Nvidia’s top customers. It’s important to note that most of these companies will continue to grow which means they need more chips which means they will spend more money with Nvidia. If you ever doubt where a company will go in the coming years, a quick tip to give yourself peace of mind is to look at their customer list.
- Amazon
- Meta
- Microsoft
- Alphabet
- OpenAI
- Dell
- Cisco
- HP
- Lenovo
- Tesla
- Mercedes-Benz
- Jaguar
- Land Rover
- Volvo
- Polestar
- Hyundai
- Lucid
- Audi
- Volkswagen
- Kia
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Nvidia stacks up against other companies.
- Nvidia (NVDA) – 100
- ASML Holding N.V – 78
- Nova Ltd.(NVM) – 78
- Axcelis Technologies, Inc. (ASML) – 78
- Lattice Semiconductor Corporation (LSCC) – 72
- Applied Materials, Inc. (AMAT) – 67
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Jensen Huang’s visionary leadership transformed NVIDIA from a graphics chip company into a global technology powerhouse.
- Under his guidance, NVIDIA became a leader in graphics processing units (GPUs), revolutionizing gaming, professional visualization, and data center computing.
- Huang spearheaded NVIDIA’s expansion into artificial intelligence (AI) and deep learning technologies, pioneering the development of GPUs for accelerated computing.
- He led the development of CUDA, a parallel computing platform and programming model that enabled breakthroughs in scientific research and computational tasks.
- Huang’s strategic focus on innovation resulted in the creation of the NVIDIA Tesla platform, driving advancements in high-performance computing and AI.
- He oversaw the successful launches of several flagship products, including the GeForce, Quadro, and Tesla GPU lines, cementing NVIDIA’s position as an industry leader.
- Huang’s commitment to research and development led to breakthroughs in GPU architecture, performance, and efficiency, setting new standards in the semiconductor industry.
- His emphasis on partnerships and collaborations with industry leaders further expanded NVIDIA’s reach and influence across various sectors, including gaming, automotive, healthcare, and robotics.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Nvidia is 90/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Nvidia (NVDA) stock a good buy?
Some of the top questions investors can have is Nvidia (NVDA) stock a good buy or should I buy Nvidia (NVDA) stock?
Investing in Nvidia is highly attractive. As a leader in graphics processing units (GPUs) and AI technology, Nvidia drives innovation in gaming, data centers, and autonomous vehicles. Its cutting-edge products and strong market demand fuel impressive financial growth. However, competition and market volatility are considerations. If you believe in the future of AI, gaming, and advanced computing, Nvidia offers strong potential. Always do thorough research before investing.
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To truly know if Nvidia is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
If you found this stock review interesting, you may also like this review on Tesla.