|Bid||46.47 x 4000|
|Ask||46.51 x 1400|
|Day's Range||46.07 - 46.68|
|52 Week Range||42.36 - 59.59|
|Beta (3Y Monthly)||0.66|
|PE Ratio (TTM)||10.80|
|Earnings Date||Oct 24, 2019|
|Forward Dividend & Yield||1.26 (2.76%)|
|1y Target Est||53.13|
Applied Materials shares slide despite beating earnings for its fiscal third quarter on the top and bottom lines. The semiconductor company says it is facing significant headwinds from the U.S.-China trade war. Yahoo Finance's Akiko Fujita and Dan Howley discuss.
Yahoo Finance’s Adam Shapiro, Julie Hyman, and Brian Cheung join Hennion and Walsh Asset Management President and Chief Investment Officer Kevin Mahn and Villere Balanced Fund Portfolio Manager Lamar Villere.
Despite a rough few weeks in the tech sector, graphics chip maker Nvidia (NASDAQ:NVDA) may be set for a bounce. Reporting both revenue growth and an increased net income, the Nvidia stock price rose 7% after the company released second-quarter earnings today that beat analysts' estimates. And those estimates were already on the optimistic side.Source: Shutterstock Yet, despite the strong operating performance, NVDA stock has somewhat lagged the market for most of the year, and even now, with this surge, isn't impressing too much. Nvidia stock is now trading at $159, showing about an 19% increase for the year. That compares to the 15% gain year to date for the S&P 500 Index and 20% for the Nasdaq Composite.Nvidia reported adjusted earnings per share of $1.24 for its fiscal second quarter, versus the Wall Street consensus of $1.15. Revenues increased slightly from $2.222 billion in the first quarter to $2.58 billion for the quarter ending July 29. The overall improved performance suggests that the recent slump in orders of high-end graphic chips has eased. The chip market may be headed towards a revival in demand from video game makers as well as large data centers.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo are we set for a longer-term rebound in NVDA stock? The fundamentals certainly look strong. * 10 Cheap Dividend Stocks to Load Up On Here are three reasons why Nvidia may be a buy after the recent solid earnings release. Strong Revenues for Nvidia StockRevenues across all business units increased from the previous quarter, according to Nvidia's earnings release. Chief Executive Officer Jensen Huang explained on the earnings call that the recent slowdown in sales of video-gaming chips and processors for artificial intelligence computing was temporary. In recent quarters, revenues had shrunk slightly for three straight quarters. Huang attributes this to the fact that customers had been working through stockpiles of unused inventories.But now, Huang sees that customers are starting to buy again. The Hugh Bet on AI May Soon Pay OffThe often overlooked driver of future NIDIA stock price is it's up and coming product offerings in artificial intelligence (AI), a gargantuan market that is only beginning to take off. Nvidia's is carefully investing in domination in the AI market, which may be worth over $15 trillion by 2030.Indeed, the AI sector faces brutal competition, particularly from rival chip markets such as Advanced Micro Devices (NASDAQ:AMD) and the giant Intel (NASDAQ:INTC), who are all aggressively investing in offering products in the AI market.However, the AI market will grow to such an enormous size, that there will undoubtedly be room for more than one winner. "The competition should show up with something," CEO Huang said. "AI is going to be a large market for everybody, and the growth is ahead of us. The bottom is behind us."To some extent, NVDA has a bit of a first-mover advantage. For example, Nvidia pioneered the use of graphics chips to run AI software in the data centers that offer cloud computing. Its line of GeForce processors have proven to be the top choice for PC gamers demanding the highest performance and the highest resolution. Timing in Chips is Everything -- and Now May Be the Time for NVDAThe chip market is notoriously cyclical. Between the specter of a trade war with China, concerns about an upcoming consumer recession in the US, to the feast or famine culture of computer hardware supply chain - particularly in the video gaming industry -- chip stocks are highly volatile.For example, last year, Nvidia stock dropped from a high of $292 in September down to $129 just three months later. More recently, the NVDA stock price went from $178 in late July to $147 just before the earnings release. At the present level of $149, Nvidia stock has probably bottomed out for the time being. With whatever doubts about a chip market slow down behind it, the stock may now be at the beginning of an upcycle.Certainly, Nvidia is operating in a tough market with formidable rivals. However, most all the bad news about a market slow down, and aggressive pricing by its rivals is now baked into the price. Investors in chip stock focus on cycles and are well prepared for a ride. For Nvidia stock, we may have passed the market bottom and set for an eventual upswing.As of writing, Theodore Kim has no exposure to any of the above-mentioned stocks. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post With Solid Q2 Results, Nvidia May Bounce Back appeared first on InvestorPlace.
NVIDIA (NVDA) stock soared 6% in today’s trading session as its Q2 earnings for fiscal 2020 beat estimates. However, its guidance missed estimates.
The rhetoric regarding the inherent war between central processing unit makers Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) has taken on a clear flavor of late. Intel, and by extension INTC stock, is in trouble.Source: JHVEPhoto / Shutterstock.com Underscoring that paradigm of late is last week's official launch of AMD's new server chip, EPYC Rome. It's not only the world's first 7-nanometer processor, but the rumor is that some big names like Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) are already using the high-powered tech. Intel's first 7-nanometer hardware is still a couple years off.Oh yeah -- the EPYC Rome CPU is also considerably cheaper than Intel's most comparable data center processor chip line call Xeon.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPast the sheer fascination with the fact that Advanced Micro Devices seemingly came back from the dead to leapfrog the dominant name in server chip technology, however, lies another reality. As impressive as EPYC Rome may be, Intel's still got something bigger and better in the works. Not Your Father's IntelThere's no denying it. Intel got caught being lazy and complacent. Advanced Micro Devices was supposedly a has-been, leaving the CPU market wide open for Intel. Since Lisa Su took the helm in 2014, AMD is back from the dead. * 10 Cheap Dividend Stocks to Load Up On Nothing lights a fire under a company like a little pressure though.Granted, research and development of technologies like computer processors is neither cheap, nor quick. Intel is still working on an effective answer to the 2016 launch of AMD's Ryzen CPU line, which offers almost as much computing power as Intel's comparable wares at the time, and at a much lower price. In the meantime, Intel continues to chase other debuts of Advanced Micro Devices hardware, though not necessarily all of them. Intel isn't looking to respond to AMD's "Threadripper" CPU.The launch of AMD's EPYC 7002 series of 7-nanometer server processors earlier this month underscored the depth of Intel's distance behind AMD. After multiple delays, Intel doesn't expect to offer its first 7-nanometer processor until 2021.It's all very unlike Intel. This Competition May Not MatterMuch of the value of technological breakthroughs like 7-nanometer CPUs is leveraging them as publicity tools. Undoubtedly, Advanced Micro Devices has gotten much mileage from being able to say it was the first to reach the 7-nanometer milestone.Companies and consumers alike just want solutions that work well, however they work.Even with its less-thrilling 14-nanometer "Coffee Lake" processors and its 10-nanometer "Ice Lake" CPUs, Intel is making highly marketable products right now.Admittedly, with the inherently slower speeds of 10-nanometer processors, Intel has to do everything else right on a computer's or server's (or a tablet's or a smartphone's) main board to extract comparable performance. But, it is doing that. Its Project Athena, for instance, is an overarching effort to make laptops and mobile devices faster not with a more powerful CPU, but by building a device from the ground up with speed and performance in mind.The device has already mapped out how it can best handle multiple files and apps, for instance.AMD hasn't thought as much beyond the development of a powerful processor. In fact, it may not have even given fully adequate thought to the development of its 7-nanometer tech. Did AMD Rush 7-Nanometer Development?It's only anecdotal, but a closer look at the performance of AMD's Ryzen 3000 series suggests not every core of the CPU is reaching the advertised operating speed.Some are wondering if AMD's rush to get a 7-nanometer chip on the market could be the culprit. Others are wondering if 7-nanometer tech is even worth the effort. As ExtremeTech's Joel Hruska wrote late last month, "Higher silicon variability [stemming from the 7-nanometer foundry process] is going to demand a response from software. The entire reason the industry has shifted towards chiplets is that building entire dies on 7nm is seen as a fool's errand…"If that's the case for other 7-nanometer hardware like the EPYC Rome, the actual performance of these new devices may disappoint some users.According to Hruska, the physical limitations involved in manufacturing silicon-based CPUs cause the bulk of the performance bottleneck. He says that future performance improvements won't come on the hardware fronts.That bodes well for Intel's Project Athena, which aims to address more feasible performance enhancements. The Bottom Line for INTC StockDon't misread the message: Intel dropped the ball. It's also willingly wading into projects that have a questionable payoff.It's already competing with AMD on the CPU front. Intel has recently begun work on discrete graphics cards that will go up against Advanced Micro Devices' graphics processing units as well as those made by Nvidia (NASDAQ:NVDA). The company is also planning a line of dedicated gaming PCs through a program currently called Phantom Canyon. There's an established market for both, but neither are necessarily aligned with Intel's core competencies. As such, they may prove more distracting than fruitful.Still, Intel is hardly being forced into the retreat mode some investors and pundits have suggested.That doesn't make INTC stock bulletproof -- market-wide weakness could still inflict damage. Assuming the global economy doesn't slip into a full-blown recession though, dips like the one Intel stock just made could continue to be great entry points.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Intel Lost the 7-Nanometer Battle, But INTC Stock Is Still a Buy appeared first on InvestorPlace.
On Aug. 15, Nvidia (NASDAQ:NVDA) reported Q2 of fiscal 2020 earnings. Investors overall seemed pleased with the results. After hours, NVDA stock went up over 5% to close at $157.09.Source: Shutterstock Today, let us take a closer look at Nvidia stock's results to see if long-term investors may find value in NVDA shares around these levels. Nvidia Stock's Q2 EarningsNvidia is a pioneering maker of graphics processing units for gaming and professional markets. NVDA sells two main products: graphics processing units (GPU) and Tegra processors. GPUs accelerate central processing units (CPUs), boosting the performance of video and graphics and improving computers' overall output.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Cheap Dividend Stocks to Load Up On Analysts are concerned about the recent slowdown in the chip sector coupled with worries over U.S.-China trade wars. However, globally there are important growth areas, such as artificial intelligence (AI), autonomous vehicles, 5G, as well as high-performance computing and gaming. These technologies depend on the bigger graphics processing capabilities of Nvidia, Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD). All three companies work hard to gain market share.During the quarter, NVDA stock's revenue rose 16.2% sequentially but fell 17.4% year-over-year (YoY) to $2.58 billion. Similarly, the adjusted EPS rose 40.9% sequentially but fell 36.1% YoY to $1.24.In Q2, Wall Street was expecting Nvidia to report revenue of $2.55 billion and adjusted EPS of $1.15.Over the past several quarters, Nvidia stock has experienced a steep decline in revenues post-crypto bust. Therefore, the better-than-expected results pushed up the stock price after hours.Nvidia stock is trading at a forward PE ratio of almost 29. In comparison, Intel stock's forward PE stands at about 11. Therefore, going forward, shareholders will want NVDA management to deliver even stronger results so that the stock price warrants the rich valuation metric. How NVDA Stock's Important Segments ReportedIn the earnings report, analysts paid attention to five segments that drive its revenues: gaming, data center, professional visualization, automotive, and edge computing.For years, NVDA has been a leader in the competitive graphics-card market. However, in recent months the battle for market share between Nvidia and AMD in that segment has intensified. As AMD launches its Navi cards, AMD's GPUs will likely take market share from NVDA in the video-game chip sector.Similarly, data center competition from Intel has increased. Nvidia recently spent $6.9 billion to buy the data center networking company Mellanox. In other words, Nvidia is telling the markets that it is not just going to be a GPU company any more.In Q2 the group's revenue data center revenue rose 3.3% sequentially but fell 13.8% YoY to $655 million. Nvidia's data center business revenue missed analysts' consensus estimate of $668.5 million.Gaming accounts for about 40% of Nvidia's total revenue. NVDA stock's sales from the gaming segment went up by 24.5% sequentially but fell 27.3% YoY to $1.31 billion. Nonetheless, the segment revenue beat the consensus estimate of $1.3 billion.In recent months, investors have been worried about the company's growth outlook, which is mostly based on its GPUs for gaming and artificial-intelligence servers. Nvidia's EPS and Nvidia stock price are very closely linked to the sales trends of its GPUs.For Q3, NVIDIA expects to book revenue of $2.9 billion, plus or minus 2%. That number is below the projected $2.98 billion for the quarter. Nvidia Stock Technical Charts Signal More VolatilityOn Aug. 15, before reporting Q2 earnings, NVDA stock closed at $148.77. Over the past year, Nvidia stock price is down about 40%, and the shares have been quite volatile. Its 52-week range has been $124.46-$292.76.As a result, the technical outlook of NVDA stock has been damaged. Its short-term chart still looks weak, and Nvidia stock price looks poised to exhibit even further volatility in the near-term.NVDA's momentum indicators, which describe the speed at which stock prices move over a given time period, have been in oversold territory for some time. Therefore, a relief rally is expected and likely to come following the quarterly results. My initial expectation is for NVDA stock to race toward $170, where it is likely to have significant resistance.However, a couple of day's move does not make a definite trend. More buy signals based on momentum indicators need to be conﬁrmed before Nvidia stock can become a long-term buy from a technical standpoint.It is important to remember that Nvidia is a momentum stock. Therefore, if you are worried about what would be a viable entry point into NVDA shares, I'd suggest that long-term investors wait until Nvidia stock builds a firm base between $165 and $145.If you already own Nvidia shares, you may consider hedging your position with monthly ATM covered calls. Such a strategy would enable you to benefit from an upside move and give some protection in case of profit-taking after the initial move up following the results.If the current trade tensions are swiftly resolved and the broader markets rally, Nvidia stock price could easily continue its rebound. In that case, the technical charts would need to be reevaluated. Bottom Line on Nvidia StockDespite the semiconductor industry's headwinds and cut-throat competition from AMD, there is strong demand for Nvidia's graphics processors, for use not only in video games but also in data centers and work stations. Industry experts also regard NVDA as a top player in the AI chip space, and its graphics chips are highly sought after for use in deep-learning applications.Nvidia is also exploring smart-city solutions, which exploit its proficiency in artificial intelligence and data analytics. In other words, the company is somewhat shifting its focus from processors to providing the full technical backbone for AI ecosystems. As the use of artificial intelligence and machine learning continues to rapidly grow, NVDA's AI business could expand exponentially.However, given the volatility of Nvidia stock price over the past year due to the ongoing questions about the fundamentals of the company and its sector, I would urge investors to be cautious about NVDA stock.The U.S.-China trade war has not helped NVDA, either, as China accounts for nearly a quarter of Nvidia's sales. The headwinds of the sector make many analysts wonder whether NVDA can, in the near future, regain the kind of rapid and sustained growth that investors got used to in recent years.Although Nvidia stock will likely reward long-term investors, tech stocks may remain volatile over the next few weeks. A couple of negative macro or global news headlines may drive the Nvidia stock price down. If that occurs, long-term investors will be given a better entry point in Nvidia stock.As of this writing, Tezcan Gecgil hold INTC covered calls (Aug. 23 expiry). More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post What to Know Before Jumping Into Nvidia Stock appeared first on InvestorPlace.
Northland Capital upgraded Intel Corp. to market perform from underperform on Friday, after the chip maker's strong second-quarter earnings. Analyst Gus Richard said the stock is now trading below his price target of $48, it's trading at 11.5 times his 2020 estimates, which are lower than consensus, it beat second-quarter estimates by $900 million and 17 cents but only increased its guidance by $500 million and 5 cents. "We think value stocks likely outperform higher multiple stocks during sell offs," Richard wrote in a note. "Sentiment (is) nearing a low point." Since Northland downgraded the stock back in December, the trade was has taken a turn for the worse, with bans on Huawei and Chinese super computer companies, he wrote. "In addition, AMD's server launch likely makes it clear Intel is going to struggle to maintain share and will suffer from pricing pressure," said the analyst. "While we expect AMD to take share in the server market over time, share in this market shift slow." Shares were up 1.4% Friday, but have fallen 1.2% in 2019, while the S&P 500 has gained 15%.
The major stock indexes were sharply higher early Friday, as they looked to end a volatile week with solid gains. Nvidia stock jumped 7%.
Nvidia, Intel and AMD drove the Nasdaq ahead of the Dow Jones today, as stocks surged into a strong open.
DOW UPDATE Shares of Intel and Walgreens Boots are posting positive momentum Friday morning, lifting the Dow Jones Industrial Average into positive territory. The Dow (DJIA) was most recently trading 160 points (0.
Investing.com -- U.S. stock futures were set to claw back more of their midweek losses on Friday, as the absence of fresh geopolitical shocks allowed the market to build on gains that began on Thursday with a batch of generally positive U.S. economic data.
Investing.com - Wall Street clawed back more of their midweek losses on Friday in the absence of fresh geopolitical shocks, but were still on course for a third straight weekly loss against the backdrop of a slowing global economy.
(Bloomberg) -- Nvidia Corp.’s second-quarter sales and profit topped analysts’ estimates, suggesting that a slump in orders may be easing amid a revival in demand for graphics chips and parts used in data centers. The stock rallied in late trading.Revenue in the quarter that ended July 28 was $2.58 billion and profit excluding certain costs was $1.24 a share, the Santa Clara, California-based company said in a statement on Thursday. Analysts, on average, had estimated adjusted earnings of $1.14 a share on sales of $2.54 billion.Sales in all business lines rose from the previous quarter, Nvidia said, a sign the company is addressing challenges that had stalled growth. Chief Executive Officer Jensen Huang has argued that a slowdown in orders for computer-gaming chips and processors for artificial intelligence tasks was temporary as customers worked through stockpiles of unused parts.Revenue has now shrunk from a year earlier for three straight quarters, and Nvidia forecast another decline of about 9% for the current period. Still, the 17% contraction in the second quarter was narrower than some analysts had projected, and the rate of decline is slowing. That may indicate customers are beginning to place new orders again.Gaming-chip sales came in at $1.3 billion, up 24% sequentially. Revenue from Nvidia’s second-biggest business, data center, climbed 3.3% from the prior period to $655 million.According to some estimates, that rebound in data-center revenue fell short. Wells Fargo analyst Aaron Rakers had predicted unit sales of $685 million, and he wrote in a note that the consensus estimate was about $669 million. On a conference call to discuss results, Nvidia executives faced multiple questions on the prospects for the business.On the call, Huang said demand for graphics chips used in servers was improving across the board, excluding a couple of so-called hyperscale data-center operators who don’t give Nvidia much insight into their plans. He declined to say when the business will return to annual growth, but maintained his optimism that artificial intelligence computing is the biggest-ever opportunity for his company.Nvidia’s detractors say that stiffer competition is the cause of the company’s struggles, but Huang said rivals aren’t eroding growth. Nvidia pioneered the use of graphics chips to run AI software in data centers, while Nvidia GeForce processors have been the main choice for PC gamers wanting the highest resolution action. Now, Intel Corp. and Advanced Micro Devices Inc. are offering rival products in these markets.“The competition should show up with something,” he said in an interview. “AI is going to be a large market for everybody and the growth is ahead of us. The bottom is behind us.”Nvidia shares rose more than 6% in extended trading following the report. Earlier, they slipped about 1% to close at $148.77 in New York.Net income in the second quarter was $552 million, or 90 cents a share, down from $1.1 billion, or $1.76, in the same period a year earlier.The company said sales in the current period will be about $2.9 billion, plus or minus 2%. That compares with an average analyst estimate for revenue of $2.98 billion, according to a Bloomberg survey. Adjusted gross margin will be 62.5%, Nvidia said.(Updates with CEO comments in eighth paragraph)To contact the reporter on this story: Ian King in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Chipmaker Nvidia is at the forefront of AI and machine learning, but earnings and share prices have dived. Here is what fundamental and technical analysis say about buying Nvidia stock now.
Outside of all other context, Microsoft (NASDAQ:MSFT) is, in my opinion, a candidate for a "forever" hold. However, no investment operates in a vacuum. Therefore, the massive 800-point plummet in the Dow Jones is an event you must consider when analyzing MSFT stock.Source: Shutterstock Let's start with the obvious. As a growth and technology play, Microsoft stock depends substantially on investor sentiment. Yes, it does pay a dividend. However, with a yield of only 1.4%, it's not nearly enough to justify an excessive position against a volatile backdrop.Further, the reason for the broader market downturn is especially problematic for MSFT stock. Initially, the U.S.-China trade war started out in some ways as a political stunt. Bolstering his image as the "sheriff," President Donald Trump imposed tariffs on Chinese goods for various acts of malfeasance, particularly intellectual property theft.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, the Trump administration may have miscalculated Beijing's resolve. With each side refusing to budge, then stepping up their retaliatory tariffs, the matter has seemingly spiraled out of control. On paper, that's pernicious for Microsoft stock. Outside of the U.S., China is the tech giant's biggest revenue stream. * 15 Growth Stocks to Buy for the Long Haul As if that weren't enough, the constant back-and-forth between the two nations may have exacerbated domestic economic weaknesses. Recently, the benchmark yield curve inverted when the yield for 10-year Treasuries slipped underneath the 2-year yield. In other words, investors are getting less reward for accepting greater time risk.It makes no sense. And not surprisingly, this dynamic represents a warning about a coming recession. Thus, investors see little reason to hold more "risk on" names like MSFT stock. No Need to Panic on MSFT Stock YetEven with a preponderance of negative news items, it's still tricky to figure out what to do with a blue-chip name like Microsoft stock. Clearly, this is no time to load the boat with the company's shares. With multiple headwinds cascading down like rainwater, you don't want to be a premature contrarian.That said, I also don't think it's a time to panic on MSFT stock. First, let's have a quick rundown about the yield-curve inversions and their implications. What this trend truly suggests is that the markets are very nervous about incoming events. Essentially, Wall Street is dealing with a math problem where key constants are replaced with variables.If you never liked calculus class, you can appreciate the sentiment. However, the increase of variables does not necessarily mean that everything is going to Hades all at once. As Credit Suisse reported, it takes on average 22 months following a "2-10" yield-curve inversion to spark a recession. Therefore, we may have some time to work things out.Optimists may note that next year is a key presidential election cycle. Thus, even a tough sheriff like Trump sees the value of seeking a peaceable solution. Naturally, that would bode very well for Microsoft stock, along with tech peers like Intel (NASDAQ:INTC) and Amazon (NASDAQ:AMZN).And positive signs do exist. Unexpectedly, the president delayed a ramp up in tariffs until after the Christmas shopping season starts. That's an important acknowledgement that the White House recognizes our economy's global interdependence.However, a trade war resolution may be some months off. In the meantime, stakeholders of MSFT stock can rely upon the underlying company's secular businesses, such as its dominance in endpoint management. Challenges for Microsoft Stock Drive EfficienciesFinally, I'd like to point out that a silver lining exists in this trade war malaise. Under bullish conditions, there's not as much incentive to push for corporate efficiencies. With the money flowing in, it's easy to get complacent.However, in a distressed ecosystem, every dollar of revenue counts. That's why if you own MSFT stock, you've got to love Microsoft's new "outsourcing" license policy as it pertains to its cloud business.Long story short, Microsoft is cutting a loophole that enables Amazon's and Alphabet's (NASDAQ:GOOG, NASDAQ:GOOGL) cloud customers to bring with them their existing Microsoft enterprise software licenses.For years, Amazon promoted such "bring your own licenses" capabilities to prospective clients. This gave Amazon and Alphabet comprehensive usability at Microsoft's expense. Now, this loophole is closed, which should help Microsoft stock at least mitigate some volatility.Still, it's probably going to be a rough ride in the coming months. If you have a large position in MSFT stock, a little trimming makes sense. Otherwise, if you're looking to buy in, wait. Almost certainly, we'll see a better entry point for this iconic tech firm.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post Microsoft Stock Is in Watch Mode, Not Panic Mode appeared first on InvestorPlace.
Nvidia’s stock went from unstoppable to nearly uninvestable in the matter of a few weeks last year and has not recovered. The sudden drop in Nvidia’s (NVDA) stock price and a competitive ecosystem that’s hard to understand are two reasons the chipmaker has scared away growth investors, who have opted for momentum bets such as cloud-software companies. The fact that semiconductor companies are cyclical, and mired in the U.S.-China trade war, has further overshadowed Nvidia’s growth potential.
Shares of Nvidia (NASDAQ:NVDA) have traded sideways as of late. Since my last article on the chip maker, NVDA stock has fallen from an open of $165.50 on July 2 to $156.05 share on August 13 then losing another $6 in yesterday's carnage .Source: Shutterstock So, with earnings due out today, is it time to buy NVDA stock?Not so fast! While the company has positive growth catalysts in the pipeline, the shares could be overvalued. NVDA stock trades at a discount to competitor Advanced Micro Devices (NASDAQ:AMD). But high expectations continue to be priced into Nvidia stock. With shares continuing to trade at a premium to broad line chip makers, now may not be the best time to buy into this one. Here's why I recommend some patience before making a move.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What's Going on at NVDA?With NVDA stock, several factors come into play. Among them are the U.S.-China trade war and the global chip glut. But the biggest factor is the GPU war with AMD. Last month, Nvidia launched the RTX line to compete with AMD's family of Navi GPUs.Both chip makers are competing for dominance of the gaming market. Part of the battle is based on performance. But price has been the primary factor in the war. AMD may have gotten the better of Nvidia on price. After pushing Nvidia to cut prices, AMD caught them off guard again -- with another price reduction. * 7 Safe Dividend Stocks for Investors to Buy Right Now This price war underscores Nvidia's troubles in the gaming space. But what future catalysts will be a shot in the arm for the Nvidia stock price? Perhaps cloud gaming is the ticket to future growth. Nvidia's GeForce NOW enables PC gamers to stream more than 500 games from anywhere, using Nvidia's GPUs remotely. The service is currently in beta, but a million-plus players have signed up for the wait list. The subscription-based service could be a cash cow for Nvidia. But cloud gaming remains a work in progress. Widespread availability of 5G is required before cloud gaming reaches critical mass.Nvidia's other businesses face headwinds as well. Last quarter, the company projected continued weak sales for the data center segment. The analyst community also believes that the data center business has yet to turnaround. But if the company can beat expectations and provide an improved forecast, investors could see a boost in the Nvidia stock price.Much of this risk could already be factored into the Nvidia stock price. But this does not necessarily mean NVDA is undervalued. With this in mind, let's take a look at Nvidia stock's current valuation. Nvidia Stock is Not CheapNvidia stock continues to trade at a discount to AMD shares. NVDA currently trades at a forward price/earnings (forward P/E) ratio of 38, compared to AMD's 69.5 forward P/E. In terms of enterprise value/EBITDA (EV/EBITDA), NVDA trades at an EV/EBITDA ratio of 28.4, compared to AMD's EV/EBITDA ratio of 69.7.While NVDA trades at a lower valuation than AMD, I continue to believe that Nvidia stock is not cheap. NVDA trades at premium to broad line chip makers such as Intel (NASDAQ:INTC), which currently trades at a forward P/E of 11.5 and has an EV/EBITDA ratio of 7. Another broad line chip maker, Broadcom (NASDAQ:AVGO), trades at a forward P/E of 50.3, but at a lower EV/EBITDA ratio (14.2) than Nvidia. With the company's growth troubles, it is tough to justify the stock's current premium to the broad line chip names. NVDA may be a strong opportunity down the road, but not at the current price. * Stocks Under $7 to Invest in Now Bernstein analyst Stacy Rasgon agrees. Rasgon recently gave the stock a "market perform" rating, believing the shares' current valuation minimized potential upside. As he wrote in his client note, "We remain somewhat cautious into the print nonetheless, and believe better entry points may exist at later dates."Rasgon's price target is $150 a share. I believe NVDA stock could go materially lower. If NVDA continues to disappoint, shares could trade closer to the valuations of the broad line chip makers. Bottom Line on NVDA StockInvestors have beaten down NVDA stock but they're not yet at bargain levels. While the company's valuation is below arch rival AMD, Nvidia stock continues to trade at a fairly high valuation. More bad news could hit the price and present a stronger buying opportunity. But it could also be a warning sign to avoid the stock further. Take your time with NVDA. Wait until a better entry point, then make your move.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post Should You Buy Nvidia Stock Ahead of Today's Earnings? Not So Fast! appeared first on InvestorPlace.
As US semiconductor companies firms adjust their supply chains to avoid tariffs, they are coming to terms with the trade restrictions on Huawei.
Since I last wrote about the four best 5G stocks to buy as the trend heated up, the sector has touched new highs. The companies benefited from telecom companies rolling out 5G wireless. That trend is not only heating up, but is accelerating. AT&T (NYSE:T) will offer a fixed-wireless-access solution later this year, letting customers get 5G internet at home. Beating AT&T in the 5G race is Verizon (NYSE:VZ), which officially became the first major U.S. carrier to offer 5G cell service. * 15 Growth Stocks to Buy for the Long Haul Verizon's victory puts pressure on telecom firms to accelerate their investments in the 5G buildout -- or risk falling behind.Here are seven 5G stocks to help you build investments for the future as the rest of the sector keeps heating up.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 5G Stock to Buy: Ciena Corporation (CIEN)Source: Shutterstock Ciena Corporation (NYSE:CIEN) stock rebounded from near-$33 lows in May after reporting second-quarter results June 6. The company reported revenue growing by 18.5% to $865 million. CIEN stock's adjusted earnings per share was 48 cents. Although the company faced tougher year-over-year comparisons, investors bid the stock to yearly highs above $46. In the last few quarters, the company reported a growth rate a few points above the long-term average of 6%-8%. Beyond this year, growth will revert to that 6%-8% range. And EPS growth of 20% a year is sustainable.Ciena acquired TeraXion for $32 million in 2016, gaining control of its high-speed photonics components, which have enabled Ciena to unroll optical chipsets. This move also gave CIEN the execution capability around TeraXion's electro-optics portion of the drivetrain as well as the company's silicon photonics.The rollout of 5G had a positive impact on the CIEN stock's most-recent quarter. And Ciena is highly engaged with its customers, especially at the optical project level. With that level of involvement with the largest tier one companies in North America, expect revenue to grow extremely well for the foreseeable future.Assuming a reasonable five-year compound annual growth rate of 7.1%, CIEN stock has an upside of over 10%. Cisco Systems (CSCO)Source: Shutterstock Cisco Systems (NASDAQ:CSCO) stock's near-term growth will come from being the world's largest secure domain name system platform, though the data center is another source of core growth. Cisco has around 35 data centers that are growing monthly, as the company expands its cloud. It has 100 million daily users on its platform, yet the company wants to be a bigger player in 5G in the future.On July 9, Cisco announced that it would buy optical component maker Acacia Communications (NASDAQ:ACIA) for $2.84 billion. In doing so, the telecom equipment supplier will widen its addressable market in the 5G space. And because service providers will put upgrading to 5G on their roadmap, CSCO will have to upgrade its optical components, too. As global internet traffic triples into 2022, Cisco will have a way to sell the hardware customers need to support all that data movement. * 7 Safe Dividend Stocks for Investors to Buy Right Now Acquiring Acacia gives Cisco the needed expertise in metro, long-haul and undersea data movement. Previously, the company's optical portfolio covered only short-range data center connections.CSCO's integration of Acacia strengthens its positioning for 5G in the future. Acacia already makes many of the optical interconnect modules in Cisco's equipment. But in the future, the demand for high-speed interconnect will increase rapidly. Nokia (NOK)Source: Shutterstock Nokia (NYSE:NOK) stock broke out of the $5 trading range when it reported fiscal second-quarter results that beat consensus estimates. The company benefited from new 5G deal wins in the quarter. Helped by improving product competitiveness, the company now has an impressive 42 commercial 5G deals and it is operational in nine live 5G networks. With the 5G rollout starting, Nokia recognized 5G revenue in the second quarter. Investors should expect that revenue recognition continuing to build in the second half of this year.Nokia is well-positioned to be a 5G player in the future. As Nokia sells 5G radio to customers, it is also selling other Nokia products. Not only that, but NOK is building its 5G business by converting all of its 4G LTE customers -- it has over 300 commercial 4G customers who need help transitioning to 5G over the next 10-20 years.Investors who gave up on NOK stock would have missed the stock rallying from $5 to nearly $5.80. In the last week, the stock traded down to the $5.20 range, creating an entry point. At a forward price-to-earnings ratio of 13, Nokia is not valued as a strong 5G player for the future. Markets are making a mistake ignoring this company's strong prospects.As many countries move quickly to deploy 5G, management may raise its guidance. Now, operators expect it will take 4-5 years after the initial rollout to get 5G deployed to 75% of their customers. That suggests Nokia's 5G growth acceleration is still in its early stages.It may also be a dividend discount: the multi-stage model suggests that Nokia stock is undervalued by 20%. NXP Semiconductors (NXPI)Source: Shutterstock NXP Semiconductors (NASDAQ:NXPI) has pivoted its business towards the automotive and 5G market over the last few years. Strong 5G deployment in the last few quarters assures the company's positioning in the space. Its second quarter, posted July 30, met consensus estimates. This is due partly to the benefit of a large mobile customer, but the higher revenue from the customer also led to lower deployment in the current Q3. To adjust for the uncertainties, NXPI lowered its Q3 revenue guidance to $2.21 billion-$2.27 billion. This is below the $2.35 billion estimated revenue.NXPI stock fell to as low as $96.11 by Aug. 5, only to recover somewhat when it closed recently at around $100. Management is bullish on the outlook for 5G but is assessing the potential near-term slowdown in the industry. With investor expectations lowered, investors have a chance to buy NXPI stock at a 15 times P/E and 11.3 times forward earnings. In doing so, shareholders are positioning themselves for the next wave of 5G spending. * 8 Dividend Aristocrat Stocks to Buy Now No Matter What Currently, NXP Semiconductors is benefiting from the growth in multi-input and multi-output (MIMO) deployment, where customers are expanding their capacity associated with their installed infrastructure. In the future, customers will move to 5G deployments. And from there, they may upgrade that capacity through software deployments to facilitate 5G. So indirectly, MIMO is driving revenue higher in the short-term. And as 5G ramps up more strongly into 2020, investors should get rewarded within a year. T-Mobile (TMUS)Source: Shutterstock In the telecom carrier space, T-Mobile (NASDAQ:TMUS) stock is creating a bigger and bolder competitor through its Sprint (NASDAQ:S) acquisition. Odds of the merger improved after the U.S. Department of Justice gave the firms clearance for the deal. But first, Sprint must divest its pre-paid business and also sell its 800 MHz spectrum license.While T-Mobile expects to deliver $43 billion in synergies from the deal, the 5G efficiencies from the merger will interest investors most. Looking into the future, T-Mobile is committed to covering 97% of the U.S. population with 5G in three years. In six years, 99% of the population will get 5G coverage. This aggressive timeline is possible because T-Mobile will leverage its 5G network.Currently, T-Mobile is deploying a 600 MHz and millimeter wave spectrum, and the former will become the foundation for its nation-wide 5G network. Once 5G smartphones are available, the company will launch 5G on 600 MHz later this year.T-Mobile's growth will also come from its broadband business. It's goal is to reach 9.5 million in-home broadband subscribers by 2024. This complements the cost synergies, with $4 billion coming from the network division, $1 billion from sales, services and marketing, and $1 billion from the back office. With consistent customer growth and higher efficiencies ahead, it is no wonder that TMUS stock is in an uptrend in 2019. Verizon Communications (VZ)Source: Shutterstock Verizon, whose shares also offer a dividend yielding 4.3% based on recent stock prices near $56, is another 5G stock to buy for the future. Its focus on the fiber deployment gives it this edge. VZ stock now has fiber in 60 cities -- and is growing at 1,400 route miles per month.Verizon's capital expenditures will support the buildout of its 5G Ultra Wideband network. For the full year 2019, capital expenditure will be in the range of $17 billion-$18 billion.Verizon has launched 5G in nine markets and aims to be in 30 within the full-year period. More impressive is the speed that VZ's 5G Mobility offers now. Handsets may now run at 1.3-1.5 gig and average up to 2 gigs. Offering speeds that are significantly faster than 4G will encourage customers to upgrade.After VZ stock topped $61 in April and is down 9.4% from there, markets are not expecting much revenue growth from 5G. Still, analysts who cover VZ stock have a $61.67 price target. * 5 Cheap Stocks to Buy Now That the Fed Cut Rates Despite the conservative expectations investors have for Verizon, 2020 will be an important year for its 5G growth. 5G Home is limited to four markets right now but will continue to expand. As the company rolls out 5G Home customer premise (CP) equipment, it will see a positive contribution to revenue in 2021. Intel Corporation (INTC)Source: Shutterstock Intel Corporation (NASDAQ:INTC) is broadening its business beyond PC central processing unit chips. It believes its network infrastructure business will benefit from the positive future for 5G, so it is investing in networks. Already, this business grew 40% since 2014 from just over $1 billion in revenue to over $4 billion last year. INTC stock is hardly trading like a 5G growth play: The stock is valued at just around 10.8 times earnings.The global rollout of 5G is driving demand for "network cloudification." Intel has opportunity in the core network and at the edge. And Intel's 10 nm Snow Ridge system on a chip technology will power 5G-base stations early next year. Already, the company secured two large telecom equipment manufacturers with this architecture. By 2022, Intel forecasts having a 40% market share.During its second quarter, Intel decided to get out of the 5G smartphone modem business. It sold the unit to Apple (NASDAQ:AAPL). This is a critical turning point for Intel because the chip giant may turn its attention towards 5G networking instead.In the near-term, growth from the cloud business will be slow and in the single digits as customers begin transitioning to 5G. Later this year and in 2020, Intel expects its cloud business to grow at a faster pace. Gross margin will fall slightly and will bottom at 57% in 2021. And while a gross margin in the 60% range next year is driven by the 10 nm chip refresh, the 5G ramp-up will help its network business.As of this writing, Chris Lau was long NXPI and NOK. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post 7 5G Stocks to Buy Now for the Future appeared first on InvestorPlace.
Memory stores what has happened in the past, but can’t tell you what will happen in the future. It seems the same is true of memory companies.
There's no question at this point that Advanced Micro Devices (NASDAQ:AMD) has executed an impressive transformation. The question is to what extent that transformation is priced into Advanced Micro Devices stock. The AMD stock price currently sits at about 30x 2020 consensus earnings per share -- a big multiple for the chip space.Source: Shutterstock But that multiple seems worth paying for one key reason: AMD has huge amounts of market share to take. With each passing quarter, its competitive position against long-time rival Intel (NASDAQ:INTC) gets stronger and stronger.Recent news only supports the case, but the AMD stock price has still mostly moved sideways. Resistance around $34 has held after the stock touched a 13-year high last month. At some point -- and likely some point soon -- that resistance will give way. And Advanced Micro Devices stock, which traded at $2 less than four years ago, will resume its upward march.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The AMD Stock Price Soars -- Kind OfAMD's Ryzen line of central processing units and its EPYC data center processors have made the company a legitimate competitor to Intel. Radeon graphics processing units have allowed the company to battle Nvidia (NASDAQ:NVDA) in that key market. * 15 Growth Stocks to Buy for the Long Haul Again, these products have been transformative. Just a few years ago, AMD served mostly as a lower-cost option for PC manufacturers. It's now a real competitor to two of the most innovative chipmakers out there.And its improvements are continuing. The AMD stock price jumped 16% on Thursday after more good news on the competitive front. In announcing its EPYC Rome server CPUs, AMD announced that it had acquired Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Twitter (NYSE:TWTR) as data center customers.Wins with two of the internet's biggest companies obviously is huge for Advanced Micro Devices. It's even more so given that the company almost certainly poached those customers from Intel. And it may be just the beginning.As Barron's noted last week, respected tech website AnandTech gave the Rome a rave review. The site's Johan De Gelas wrote:So has AMD done the unthinkable? Beaten Intel by such a large margin that there is no contest? For now, based on our preliminary testing, that is the case. The launch of AMD's second generation EPYC processors is nothing short of historic, beating the competition by a large margin in almost every metric: performance, performance per watt and performance per dollar.Analysts in the industry have stated that AMD expects to double their share in the server market by Q2 2020, and there is every reason to believe that AMD will succeed. The AMD EPYC is an extremely attractive server platform with an unbeatable performance per dollar ratio.With those kind of reviews, AMD may have many more wins ahead -- particularly since Intel's competing chip won't be available until next year. What's Wrong with AMD Stock?Even with that win, and the 16% one-day gain, however, the AMD stock price has mostly stalled out. And there are three potential concerns here.First, its technicals don't look great, for investors who follow the charts. Resistance keeps holding around $34. Indeed, I argued ahead of earnings that AMD stock could bust through that ceiling; it hasn't done so yet. And as I noted last month, this is a stock that on occasion has fallen sharply and swiftly after hitting resistance in the past.Second, as noted, valuation is pricing in quite a bit of strength as is. We've seen with the plunge in NVDA stock what can happen when a chip stock gets overvalued. This remains a cyclical industry, and yet Advanced Micro Devices stock isn't quite priced as such.Finally, AMD is taking market share -- but there are questions about those markets. PCs still drive a decent chunk of sales. Intel and Nvidia highlighted first-half slowdowns in data center demand. Both companies expect an acceleration in the second half -- and AMD management sounded confident on its second-quarter conference call -- but a weaker-than-expected market could dim investor enthusiasm toward AMD stock. Risks Worth TakingEven with those risks in mind, however, AMD stock looks attractive back at $30. And there's one broad reason why. AMD, even after the big gains of late, still has a market capitalization of about $33 billion. Intel, on the other hand, still is worth over $200 billion.It's too simplistic to say that AMD's market share gains mean that it can take value from Intel. After all, both companies can move higher (or lower) depending on how overall end markets respond. And Intel has operations in areas like NAND flash, where AMD is not a competitor.Still, from a very broad standpoint, the argument is simple: There's a lot of Intel market share that AMD can take. And that means there's a market opportunity worth multiples of the current AMD market capitalization. With Advanced Micro Devices still executing, and clearly set to take more share, there's more value to be added -- and more gains for AMD stock.As of this writing, Vince Martin did not hold any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post AMD Stock's New Products Mean Even More Market Share appeared first on InvestorPlace.
Currently, institutional investors own 71.2% of AMD's shares. Institutional investors like AMD stock more than Intel (INTC) and Nvidia (NVDA).
The recent delay in the tariffs on China has sent a wave of optimism throughout the tech sector—especially the semiconductor industry.