Nvidia Has a Secret Weapon to Keep Growing Long Into the Future
High-end chip maker Nvidia (NASDAQ: NVDA) has smashed expectations year over year, with annualized revenue growth of 60% since 2021. With yearly releases of improved graphics processing units (GPUs) for both gaming and cloud computing, the company has been able to continuously offer the best GPU hardware on the market. This strategy has led the company's stock on a meteoric rise. But what happens if the growth stops?
At Friday's prices, Nvidia's price-to-earnings ratio is around 80, more than double the valuation of the tech sector overall. That means if growth slows or profitability wanes, its stock price could get slashed. In fact, competition in the high-end GPU market could end up challenging Nvidia's revenue growth.
But growth-minded investors hoping the upward trends that make Nvidia so valuable can take heart. The company's new focus on its data center product lines could be the answer.
Source Fool.com
