NVIDIA: The Next Trillion Dollar Company?
In this video, I will be talking about NVIDIA (NASDAQ: NVDA) and why I believe it will become the next trillion-dollar company, and potentially one of the world's biggest and most important companies. The stock is up 40% year to date compared to its peers Intel (up 15%), which has been lagging behind in recent years, and AMD (down 9%), which has enjoyed hypergrowth in recent years. It's safe to say that NVIDIA isn't feeling the heat despite the global chip shortage concerns.
NVIDIA reported Q1 revenue of $5.66 billion, up 84% year over year, while its diluted earnings per share climbed to a record $3.03, up 106%. Its core business is split into four segments: gaming, data centers, professional visualization, and automotive. The gaming segment makes up most of the company's revenue, with 47%. The data centers segment makes up 40% and is growing at a five-year compound annual rate of 82%. Professional visualization and automotive make up 6% and 3%, respectively. It's safe to say that all four segments will continue to grow as we make the transition to a completely digital world.
Back in September of 2020, NVIDIA announced that it will acquire Arm for $40 billion. But since then the potential deal has received a large amount of backlash from the semiconductor industry because Arm has long been a neutral player, licensing key intellectual property to customers who are otherwise rivals, such as Apple (NASDAQ: AAPL) and Qualcomm (NASDAQ: QCOM).
Source Fool.com
