On 7th May 2018, the Bank of America Merill Lynch claimed that Nvidia shares will thrive considerably this year, with the generation of higher than expected earnings per share.
However, with Nvidia’s crumble just a month prior, after their autonomous vehicles development was put on hold, this rise could be hard to believe.
The Bank of America’s endorsement, however, has the potential to change attitudes towards this in the future. The firm has listed Nvidia as a ‘top sector pick’ and reinforced their suggestion to gamers to buy, improving the chances of increased shares in the future.
Nvidia And Their Ongoing Projects
Nvidia is at the forefront of the gaming development industry, with countless products including AI and Deep Learning, autonomous machines and self-driving vehicles. Their GeForce Gaming range, in particular, is popular amongst gaming fans, providing powerful graphics cards, laptops, desktop computers and monitors, designed with gaming in mind.
This range gives gamers access to optimised gameplay, game-ready drivers for any title they wish to play, Nvidia Shadowplay that allows easy recording and sharing of gameplay, the opportunity to try the latest Virtual Reality releases through plug-and-play compatibility with leading headsets, and lastly, incredible graphics to marvel including DirectX 12 and 4K and HDR realism.
Nvidia’s market dominance comes from its lead in the world of artificial intelligence and virtual reality, providing markets with new technologies and motivation to expand. The company’s expansion into the autonomous vehicle market gave this game chip maker an entirely new focus and a ‘way in’ for brand new markets in countless industries.
2017 saw Nvidia become the best-performing chip stock in the US market alone last year and with their additional projects also gaining traction, including the building of partnerships with Volkswagen and Uber, Nvidia has been enjoying success across the board.
The Initial Tumble
March 18th, 2018 shook up Nvidia’s progress in the autonomous car markets, however, after a self-driving Uber vehicle containing their technology killed a woman in Arizona.
Uber halted all tests of autonomous vehicles in all of its locations, and Nvidia quickly followed suit by halting tests across all of its partners to give them the opportunity to better improve the technology for optimal safety before they’re allowed back on the roads again. However, this decision didn’t come without consequences.
As information surfaced, it became evident that the crash should never have happened. Claims that the pedestrian had rushed out without warning were quickly proven wrong when footage suggested she was already in the road long before the car approached. The technology and sensors should’ve picked up the presence regardless of the fact it was dark and for this reason, Nvidia and Uber were quickly put under scrutiny.
As a result, NVDA shares fell around 8% to just $225.52 following the accident, but regardless of this tumble, the Bank of America Merill Lynch (BAML) still seemed to be supportive with a $300 price target for the company.
This leading technological hub has worked with incredible strength in the industry to help the rise of iGaming and gaming technologies and remained strong within the gaming markets regardless. However, their future position within automated machinery and self-driving vehicles was one that very few were willing to predict after the crash.
Bank Of America Adds Nvidia To Top Stock List
This support from BAML manifested in their addition of the company to their top stocks list, giving it the top spot in the ‘semiconductors/technology’ sector. This only reiterates BAML’s buy and ‘top sector pick’ ratings for the company.
According to Vivek Arya, a Bank Of America analyst, Nvidia prove to be a unique case, with the potential for growth in markets within artificial intelligence, gaming, virtual reality and, of course, autonomous cars.
The Rise Of Shares
True to BAML predictions, NVDA is looking to be improving already, with consistent rises ever since. On the 14th May, the market closed at $255.36 with 12,339,063 volume.
This growth could be a result of the shift of focus from miners to gamers for the company, with more ‘average’ gamers being able to afford the rigs, graphics cards and laptops once more as prices are beginning to lower.
As a result of the increasing popularity of cryptocurrencies, Nvidia has seen a growth in demand for GPU devices, particularly in the crypto miner community. As a result, prices began to inflate which started to leave everyday gamers behind – but this shift seems to be reversing.
Cryptocurrency miners are seen to be turning away from the act, with the entire process proving to be far less profitable than the industry has previously seen. With the cost of mining a single bitcoin often exceeding the price within the markets, it’s no surprise that the most ‘casual’ miners are giving up on the venture completely, reducing demand from this market and making it possible to find in-stock gaming processors at affordable prices for gamers.
With the focus returning to gaming, Arya has reiterated his predicted price target of $300 for Nvidia and the company is certainly looking to aim for that in the near future.
The nature of Nvidia’s future in each of its industries is looking up but as we have seen with the Uber crash in March, the markets can be volatile in times of uncertainty. However, with further development and adherence to health and safety, they could be optimising their gameplay and their autonomous vehicles in no time.