Credit where it's due - NVIDIA (NASDAQ:NVDA) (or "Nvidia") has executed a lot better over the past year than I thought it would
and the shares reflect that. Nvidia's stock has risen close to 70% over
the past year, leaving just about everybody in the dust. It is to
management's credit that it has driven performance to a point where
concerns about the loss of licensing revenue from Intel (NASDAQ:INTC)
and still-significant exposure to gaming are secondary relative to the
emerging long-term opportunities in markets like virtual reality, data
centers, "deep learning" and autos.
Clearly the company will have to maintain its execution edge, and companies like Intel, Advanced Micro (NASDAQ:AMD), and Mobileye (NYSE:MBLY)
have their own growth plans that don't include letting Nvidia beat
them. I think Nvidia can continue to leverage its expertise in GPUs to
grow and diversify the business, but it's hard to call the stock really
cheap at these levels unless you believe auto (or other markets) can
drive long-term double-digit free cash flow growth from here - a tall
order for a company of Nvidia's size, but not impossible.
Read more here:
For Nvidia, Execution Is The Best Answer
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