It’s time to welcome Nvidia (NVDA) as an elite Wall Street stock
So far, 2022 has been a turbulent year for equities globally. As investors continue to sell assets amid widespread market uncertainty, we may be seeing a fundamental shift in Wall Street’s historically safest stocks. As the relative security of FAANG businesses continues to be tested, it may be time to reconsider where the power lies in a market that is preparing for the metaverse.
Clearly, it’s worth noting that Nvidia (NVDA) has not been immune to the sell-off in tech stocks on Wall Street. At the time of writing, NVDA is around 47.11% off its all-time high set in November 2021. Additionally, Nvidia’s stock recently fell again following a healthy income report from rival graphics chip company Advanced Micro Devices (AMD).
As the past year shows, Nvidia has seen significant growth as news from the Metaverse sparked widespread optimism among investors about the company’s future role in the latest evolution of the World Wide Web.
Confidence in the stock was such that it remains up more than 21% year-on-year despite a deep correction.
As investors continue to look for indicators regarding demand for Nvidia’s products in the near-term data center and gaming markets, the company’s long-term outlook may be strong enough for its stock to finally gain recognition with the same level of reverence as Wall Street’s age-old FAANG favorites.
Growth ahead of Metaverse Utility
Although Nvidia should see its recent challenges laid bare in a earnings report due May 25the company has no trouble maintaining its market-leading position when it comes to GPU sales.
According to Newegg’s graphics card sales rankings, the company’s GeForce models are completely dominate the current top 10 Also, the entire top 20 is populated by Nvidia products, except for one AMD entry in 15th place, which is the MSI Mech Radeon RX 6600. This means that ‘About 95% of the top 20 selling graphics cards are made by Nvidia.
This puts the company in a good position as the metaverse begins to take shape. Due to the immense computing power involved in creating this new digital frontier and the overall potential the metaverse holds across a range of industries, it is likely that GPU products will be in much greater demand over the next few years. .
“The metaverse will affect nearly every industry on the planet. Regardless of what you do for a living, it’s likely that this technology will find applications in your field in the future,” explained Maxim Manturov, Head of Investment Advisory at Freedom Finance Europe. “Businesses have so many ways to use space technology, from hosting virtual events to mirroring their inventory with 3D models or advertising using AR lenses on Snapchat, Instagram/Facebook, and soon on TikTok. According to analysts at MetaMetric Solutions, real estate sales in the metaverse will top $500 million in 2021 and could double in 2022.”
“People are already ready to invest heavily in ‘internet properties’, including digital real estate, digital fashion, high-end cars, etc. Global giants like Unity, Apple, Meta, Roblox, Microsoft, Nvidia have created their own metaverse and continue to invest.
“MANG” rather than “FAANG”?
Financial analysts at Jefferies recently recommended that investors avoid turning to FAANG + Microsoft and instead consider MANG as a new Wall Street standard. The FAANG stock collective consists of Meta Platforms (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX) and Alphabet (GOOGL).
Although FAANG companies, alongside Microsoft (MSFT), have been hugely popular over the past decade and beyond, stocks are starting to face deep declines. In the case of Netflix specifically, the stock has fallen over 70% in 2022 alone. Similarly, Facebook is currently seeing a 41% decline in 2022 to date.
Alternatively, the MANG group, which consists of stocks like Microsoft, Apple, Nvidia and Alphabet, represents a better option for investors, due to “their balance sheet, earnings yield and free cash flow yield”. according to Sean Darby, who led the analyst councils at Jefferies. Additionally, Darby pointed out that FAANG + Microsoft is “not a homogenous group” and that MANG offers investors the best opportunity for future returns.
Although Nvidia has also been hit hard by recent sell-offs of tech stocks by investors, its market-leading position in GPU production could leave the company much better positioned to recover more quickly in a market that is expected to assist. to the development of the metaverse. Although we recently saw the strong earnings announcement as a reminder that the threat from rivals is still very much present, Nvidia remains the company best positioned to fuel the metaverse – and that remains a tantalizing prospect for investors.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.