How to buy Nvidia (NVDA) stock
Nvidia (NVDA) chips power a future of self-driving cars, cryptocurrencies, cloud gaming and the metaverse. The company is the leader in the discrete desktop GPU market. It's also a leading provider of the processors that are used in data centers and in self-driving cars. For those investors looking for top large-cap stocks to buy now, investing in Nvidia can be a winning strategy over time.
How do I buy shares in Nvidia?
There are a variety of accounts and platforms that you can use to buy Nvidia stock. You can buy NVDA stock yourself via an online brokerage, or you can hire a financial advisor or a robo-advisor to buy them for you. If you have a basic understanding of investing, you can open an online brokerage account and buy stocks. If you would prefer to have more advice and guidance for buying stocks and other financial goals, consider hiring a financial advisor. Robo-advisors are a simple, very inexpensive way to invest in stocks. The best method will be the one that aligns with how much effort and guidance you’d like to invest in the process of managing your investments.
Investors who purchase stocks directly through an online brokerage are also referred to as “self-directed” or “Do-it-yourself” investors. This approach requires you to do your own research before picking Nvidia stock. A discount brokers such as eToro and Robinhood can save you a lot of money in trading fees and commission. In addition to these discount brokers, you can also use a full-service brokerage firm
Purchasing individual stocks is not the only way to invest in Nvidia stock. You can also hold Nvidia stock using Exchange-Traded Funds (ETFs).
When you choosing Nvidia stock, it's not a bad idea to stick with the Warren Buffett mindset that you're going to buy and hold these shares for years, even decades, to come.
Should you invest in Nvidia?
Nvidia is expanding in growth areas, such as data centers, automated cars and cloud gaming. The adoption of metaverses and cryptocurrencies could further stoke demand for Nvidia chips.
Nvidia has made a big push into metaverse applications. Nvidia's chips and computing power are key to the emerging metaverse. Many companies will build the metaverse, analysts say, but most of the revenues will come from companies providing the infrastructure — such as NVDA.
The automotive business is increasingly seen as the next big growth catalyst for Nvidia. The company offers a complete platform solution, which includes hardware, software, and infrastructure (servers, computing power, and data centers) required to support autonomous vehicles.
Investors looking for a growth stock have a good reason to buy NVDA right now. Nvidia stock has been a fine performer over the past couple of years, rising more than 230% thanks to the robust growth in the company's earnings and revenue. The chipmaker is set to finish fiscal 2022 with revenue increasing 60% and earnings per share growing 74% over the prior year. Analysts expect Nvidia's earnings to grow at a compound annual rate of 39% for the next five year.
NVDA now sees chip supplies improving throughout 2022, but is Nvidia stock a buy?
Is Nvidia stock a buy now?
Shares of Nvidia are currently down by around 30% this year. Much of that drop-off can be attributed to traders shifting their funds away from growth stocks and into value stocks in response to the Federal Reserve's plans to hike interest rates and reduce its balance sheet in 2022.
The Nasdaq 100 Technology sector index is already down over 19% in 2022 and could slide further into a bear market. As the result, Nvidia investors may consider selling the stock right now and avoid any more losses. Even though the stock is expensive compared to the Nasdaq 100 index, with P/E ratio of 55.5, it's never been cheap before.
The 21 analysts offering 12-month price forecasts for Nvidia have a median target of 352.65, with a high estimate of 400.00 and a low estimate of 245.00. Out of 21 analysts covering NVDA stock, 17(81%) rate it a buy, 4 (19%) have a hold and 0 (0%) has a sell. This rating has held steady since March, when it was unchanged from a buy rating. The median estimate represents a +65.16% increase from the last price of 213.52.
My thought?
Although it's true that Nvidia stock has gotten a lot cheaper — losing about a third of its value over the last three months —Nvidia still looks too expensive. But it is priced really, really high for good reason. Personally, I own it and have no intention of ever selling it at this point..
Besides NVDA, fabless chip stocks include Qualcomm, Broadcom (AVGO) and Monolithic Power Systems (MPWR). The fabless group ranks No. 112 out of 197 industry groups. For the best returns, investors should focus on companies that are leading the market and their own industry group.
