Nvidia (NASDAQ:NVDA) has been one of the best performing semiconductor stocks this year with its stock surging 52% since the beginning of the year. The Q1 results released on May 21 will help prove that the performance is justified.
Nvidia revenue could hit $13.3 billion this year
The exceptional performance has led to BMO Capital Markets’ Ambrish Srivastava to up his price target for the stock from $285 to $425 stating that Nvidia is now “entering beast mode.” Interestingly this bullish sentiment is not without basis considering the company’s operations during the COVID-19 pandemic have mostly remained unaffected. Various business lines of the company have witnessed massive growth during this period and as a result the company is likely to see its revenue climb to $13.3 billion in 2020.
The company supplies ultra-modern tech for different AI applications and this is a market that is growing fast. According to Grand View Research, the global AI market could hit $390.9 billion in the next five years. Although the main claim to popularity for Nvidia is its GPU processors it is equally producing and offering products and services in other emerging sectors.
Gaming and cloud to drive Nvidia’s growth
One area that will capitalize on is the gaming industry which is growing fast. With coronavirus restrictions more people are staying at home and this could mean gamers will order more of Nvidia’s products and services. For instance gaming laptops revenue was already growing in the quarters before COVID-19 and it is likely to shoot higher. Demand for its Max-Q laptops has been growing registering record sales.
The company is also betting on cloud computing as a key driver of growth. Jensen Huang the company’s CEO indicated that they expect growth in their public cloud because of the proliferation of tech startups. The startups prefer developing AI in the cloud because it is cheaper and convenient.
