TS2B: Tech Stocks 2 Buy, Mega-Cap Edition on Nvidia 11.16.20

A great cyber-day to everyone and welcome to the BCB Cyber Series that takes on the Tech stocks that can provide the cyber-fuel we need to pursue our digital wealth passions.

Today, we’re talking Mega-Cap Tech. As we dig for the cyber-fuel we need, we are always working to make sure to find the best of the best, those monster companies in tech, that can form a key part of our portfolios.

For all these mega-cap stocks, just like Investopedia, our core defining feature here is that the market cap is over $200 Billion! And for today’s analysis, Nvidia definitely fits that bill with a market cap over $328 Billion.

As always though, we dig deeper still, going beyond those basics. Always seeking out those companies that are pushed by incredible disruptive tech with a great story, not to mention having a solid base in the numbers.

Becoming the Mark to Beat

Mega Cap is one thing, the name to beat in an industry is another. And Nvidia fits both bills.

Before we dive too deep though, we strongly advocate that we don’t act solely on anyone else’s opinion, even ours! Make sure we are all thinking for ourselves as self-definers and making our own decisions. In the end, the responsibility is on each one of us as individuals. So decide wisely!

BCB Cyber: Mega-Cap Analysis

Jumping right in the BCB Cyber way, we cover 3 quick pieces of important information so we can get moving on our day. First, we tackle the story to find out who and what the company is, second, we look at the numbers both positive and negative, and finally we discuss our position on the stock.

This is TS2B, Tech Stock to Buy, Mega-Cap edition, and this week we are going to take on Nvidia, the Santa Clara, California, visual computing company competing in both the GPU and Tegra Processor segments and looking to dominate AI and compute from data center to the end point.

From GPUs to dominating visual computing, Nvidia is now the name to beat in the chip world. More than that though it is utterly committed to pushing the industry beyond its limits with a holistic research approach that the company is wholly invested in. They are the company that repeatedly redefines the industry.

1 – STORY

Nvidia is the name of the semiconductor the mega-cap block. Nvidia dominates this market and in the last year alone has made major acquisitions in the data center with Mellanox and in edge computing with the most recent acquisition of ARM. Nvidia, like Tesla week and Alteryx two weeks ago, hits all the checklist boxes we love to see in a disruptive tech company.

The following graphics highlight this: Unparalleled leadership, a slate of products primed to redefine how the world produces, stores, and uses energy, and ultimately, a company that is primed financially for tremendous growth and prosperity.

Enter any google query on Jensen Huang, CEO of Nvidia, and you will find long lists of accomplishments, accolades, and those seeking to learn from Jensen’s leadership prowess.

As Nvidia already sets the edge of performance in the industry, they are always striving to outdo themselves in both performance and price.

The bottom line for this tech giant is simply that it is at the top of its game. Nvidia, as reported by Investor’s Business Daily, has outperformed 96% of ALL STOCKS in the last year and ranks at the top of their profile boards. Could we ask for more? Maybe not, but Nvidia certainly does!

2 – BY THE NUMBERS

BCB Cyber loves to follow five specific metrics: Revenue Growth, Forward Price to Earnings Ratio, Return on Assets, Operating Margin, and Debt Considerations. Nvidia is at the top of the game in all respects.

While growth in revenue has slowed the last few years, it was to be expected as their product lines came to the end of their run but that was before new chipsets were being revealed (see the 3080 above), and new acquisitions were being added (Mellanox and ARM) to help drive revenues in incredible markets. Already primed with an incredible AI stack that is above all others, the opportunities are endless. In fact, Nvidia already been recognized as being better than everyone thought, and those estimates had been pretty high, to begin with! Regardless of the stagnation, they still topped $10 Billion two years going and the future looks even brighter.

When it comes to effectiveness and profitability, few do it better in the tech world than Nvidia. Top-notch operating margins helping to fuel future development, and a return on assets for shareholders at nearly 12%, this is a great, well balanced mega-cap stock worthy of our portfolio, no doubt!

As for the last concern where so many come short, debt considerations are also of little concern. As we have already expressed, management is incredible and in managing their ability to cover debt there is no exception here either. Nvidia comes out on top!

3 – THE BCB CYBER TAKE

While we do love simplywall.st, we think they fall way short on the opportunity here. Perhaps understatement is their goal but the BCB Cyber take has it much higher. Not only do we see the health, future, and past at higher levels, we also see that there is value in this stock still and we even get a small dividend! What could be better?

As of this morning 11.16.20, my own portfolio has a position of 21.32% in Nvidia, our highest of any stock, with a basis of $258.33. This is definitely a stock worth buying at the right price and one hat, without question, BCB Cyber believes to be the right fuel for the fire for our futures!

As always, think for yourself, do your own homework, and cyberize your life with the best in disruptive tech. Learn more in our Wealth Section and dive deeper with Establishing the Baseline!