The NVIDIA Corporation (NASDAQ: NVDA) made enormous amounts of money in 2020.
For instance, NVIDIA (NVDA) reported a quarterly operating income of $1.507 billion and a quarterly gross profit of $3.157 billion on 31 January 2021. The quarterly operating income rose from $990 million on 31 January 2020. Meanwhile, the quarterly gross profit grew from $2.015 billion on 31 January 2020.
Similarly, the quarterly revenues rose from $3.105 billion on 31 January 2020 to $5.003 billion on 31 January 2021. Incredibly, Stockrow estimates that NVIDIA’s revenues grew by 56.80% in the quarter ending on 31 October 2020. They reported no revenue growth rate on 31 January 2021, but there was a quarterly revenue growth rate of 49.9% on 31 July 2020.
How Much Cash Does NVIDIA Generate?
Predictably, NVIDIA (NASDAQ: NVDA) is generating enormous amounts of cash.
For instance, NVIDIA reported a quarterly operating cash flow of $2.067 billion on 31 January 2021. The quarterly operating cash flow rose from $1.465 billion on 31 January 2020.
In contrast, the quarterly ending flow fell from $1.131 billion on 31 January 2020 to -$1.404 billion on 31 January 2021. Interestingly, the quarterly ending cash flow rose to $15.494 billion on 31 March 2020 and fell to -$12.220 billion on 31 July 2020.
NVIDIA borrowed some money in the form of a $4.744 billion quarterly financing cash flow on 30 April 2020. However, NVIDIA reported a -$342 quarterly financing cash flow on 31 January 2021.
What Value Does NVIDIA Have?
NVIDIA (NVDA) offered enormous value on 31 January 2020. That value included $28.791 billion in Total Assets and $11.501 billion in cash and short-term investments.
The Total Assets grew from $17.315 billion on 31 January 2020. The cash and short-term investments grew from $10.897 billion on 31 January 2020. In contrast, NVIDIA had a long-term debt of $5.964 billion on 31 January 2021. The long-term debt grew from $1.991 billion on 31 January 2020.
Thus, NVIDIA’s value grew in 2020, as did its cash. NVIDIA became a more valuable company in 2020 as demand for video games, the cloud, streaming video, and artificial intelligence grew.
Moreover, the COVID-19 pandemic seems to sped up NVIDIA’s growth. Consequently, NVIDIA is a coronavirus resistant company.
NVIDIA doubles down on gaming and streaming video
Sensibly, NVIDIA (NASDAQ: NVDA) is doubling down on gaming.
For instance, The Verge reports NVIDIA will boost the frame rates on its 30 Series GPUs (Graphics Processor Units) by 10% in March. GPUs are the powerful computer processors on which today’s video games run.
The hope is the faster GPUs will increase game performance. However, The Verge notes that faster GPUS actually decrease performance in some games.
In addition, NVIDIA is trying to stop cryptocurrency miners from diverting its popular RTX 3080 and RTX 3070 graphics cards to mining, Tech Radar reports. The super-fast cards are perfect for miners who want to mine (create) enormous amounts of cryptocurrency. Sky-high Bitcoin (BTC) prices are driving a crypto bubble and increasing mining’s popularity.
NVIDIA Battles Cryptocurrency Miners
“We would like GeForce GPUs to end up with gamers,” NVIDIA CFO and executive vice president Colette M. Kress said, “so we have created a new special software drivers that will detect the Ethereum mining algorithm, cutting in half the mining efficiency of the GeForce RTX 3060.” Kress made the statement during NVIDIA’s 24 February 2021 earnings call.
NVIDIA will add a driver update to Ampere cards that could detect the mathematical hashrates speculators use to mine Ethereum (ETH), Tech Radar claims. Hopefully, the driver will order the card to limit performance, making it to slow to mine Ethereum.
Kress worries because many gamers could not find or afford RTX graphic cards. Speculators have been buying the cards and reselling them to miners as soon as the RTX products appear in stores.
Is NVIDIA an Excellent Dividend Stock?
I consider NVIDIA (NVDA) a reliable dividend stock because it will pay a 16¢ quarterly dividend on 31 March 2021.
Overall NVIDIA paid a 64¢ annualized dividend a 0.12% dividend yield on 1 March 2020. I think the dividend and dividend yield are low but they are reliable.
I consider NVIDIA a reliable dividend stock because it has a high margin of safety and enormous cash. However, NVIDIA is not a payer of high dividends.
Does Mr. Market Overprice NVIDIA?
I think Mr. Market overpriced NVIDIA (NASDAQ: NVDA) at $521.92 on 3 March 2021 and $536.25 on 2 March 2021. That price grew from $276.43 on 2 March 2020.
I consider NVIDIA overpriced and part of the cloud bubble. Conversely, I think NVIDIA is a superb stock that offers high levels of income, growth and cash.
I believe NVIDIA’s share price will collapse soon. Thus, I advise people to wait until NVIDIA falls to a price under of around $200 to buy it. However, NVIDIA will not disappoint those seeking a stock that will grow and pay steady dividends.