Nvidia's (NVDA) upward climb on the stock markets is not likely to end soon. News that Softbank quietly added $4 billion worth of the stock in its portfolio only re-affirms the bullish sentiment for the company.
Softbank is now the fourth-largest shareholder in NVDA. The investment makes the analyst downgrades and sell calls on the stock look foolish. Holding NVDA makes sense because Softbank already owns ARM Holdings. It is positioning its technology investments such that it gets exposure to semiconductors that develop autonomous driving and deep learning solutions.
Fundamentals for Nvida are strong. The company reported a near doubling for operating margins in FY2017. Earnings more than double as revenue grew 38% Y/Y. Beyond the GPU (graphics card) market, the company is investing in AI, through the Tesla V100 and TensorRT offerings, just to name a few products. Nvida's CEO said:
"The AI revolution is moving fast and continuing to accelerate." "NVIDIA's GPU deep learning platform is the instrument of choice for researchers, internet giants and startups as they invent the future."
Takeaway
Nvidia is the leader of the pack for high-end gaming chips. It only started rolling out the 1080 Ti card. Should the stock dip on profit-taking, investors that missed the run may want to consider buying this stock.
