NVIDIA is an attractive option for all investors right now. When we think of NVIDIA, we think of the best GPUs in the market and the best brand for millions of gamers worldwide. However, we don’t think of it as one of the best companies to invest in. But this has been the case for this brand for many years. It has grown so large and ever so successful that even investors outside the tech and gaming spectrum are investing in its stocks.
It has reached a market cap of $800 billion this year, next to Meta and above huge companies like Berkshire Hathaway and Tencent. Its ranked 8th among the highest market caps in the world. If you don’t know business jargon, having a high market cap means you’re a good company that produces high-quality goods. But that’s not the only reason why NVIDIA is on par with the business giants. Its management’s also considered to be one of the best.
As a CEO, Jensen Huang is one of the most driven and experienced CEOs. He was an overachiever when he was in school and college and is considered an overachiever until now. He built NVIDIA into a billion-dollar company with only $40,000 distributed among his colleagues. He is creative and intuitive, and he plans to innovate the entire industry.
If you’re an investor of blue-chip stocks, you’ll have to consider that you’re investing in a company’s CEO. Look at Tesla, for example. People who invest in such a company believe in Elon Musk’s strategy and vision. If they didn’t, then no one in the right mind would like to invest in a company that’s $10 billion in debt.
This is the same case for Jensen Huang. Again, thousands of investors believe in his vision, but unlike Tesla, NVIDIA has high-profit margins to show for it.
High market cap companies like NVIDIA are considered to be low-risk investments. This is because there is a good chance your investment will grow alongside the company. Additionally, it’s also because of their high-profit margins. To give you a view, the company’s overall net income this year is $2.46 billion, achieving a staggering 83% increase year-over-year in net profit. That’s a pipe dream for many big companies.
What attributes to these high-profit margins? The cryptocurrency boom in 2017 led to a massive shortage in GPU stocks. Miners wanted their hands on every GPU in the world, regardless of the price. They were making thousands of dollars in profits, anyways, and could afford to purchase GPUs at a premium. This led to a shortage in GPU stocks from NVIDIA, and because of the high demand, this means that they can sell their GPUs at a much higher price. Being able to have this power over the market means instant success.
However, many attribute this success in cryptocurrency to luck. There weren’t any signs that Bitcoin would become big in just a few years. However, NVIDIA proved that its success wasn’t just from luck. In the next few years, NVIDIA made investments into commercial GPUs, which appealed to even the most casual of gamers and AI. They produced the AI necessary for Tesla cars to drive themselves. Lastly, NVIDIA also ventured into their gaming builds, which appealed even more to gamers.
It was only recently when NVIDIA had the guts to start selling their advanced gaming builds into the market. These come in the form of gaming PCs and laptops. Many found these rigs to be quite attractive even though they were some of the most expensive in the market. In addition, their performance and efficiency were unmatched compared to any other builds.
However, these builds can be considered to be cheaper than most if we’re talking about performance. No other builds can get your frame rate-to-dollar ratio than NVIDIA builds. For example, the recent RTX 30 series laptops are considered to be the cream of the crop when it comes to gaming laptops. It sports the latest ray tracing tech and has the recent 3rd Gen Max-Q tech, which increases gaming performance without sacrificing quality.
No other laptops can perform at the same level. Moreover, these laptops are quite customizable if purchased on PC builder websites. This shows how flexible and reliable NVIDIA can be in gaming, and it seems that it’s the best brand for any gamer out there.
NVIDIA has reached one of the highest market caps in the world. It dominated its market, made itself accessible and reliable to its audience, and has good management. All of these things have brought about the success of NVIDIA and why it’s considered to be one of the best companies to invest in.