Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Good Stocks

Why is NVIDIA (NVDA) Surging?

NVIDIA’s (NASDAQ: NVDA) share price is exploding. In fact, NVIDIA’s share price grew over $180 in 2020.

To elaborate, Mr. Market paid $239.91 for NVIDIA on 2 January 2020 and $419.17 for NVDA on 10 July 2020. However, NVIDIA’s share price fell to $402.09 on 13 July 2020. Thus, NVIDIA’s share price grew by $180 during a pandemic but lost some of that value.

Hence the NVIDIA Corporation (NASDAQ: NVDA) could be the perfect stock for our age.  I think NVIDIA could be coronavirus resistant because it manufactures the graphics processing units (GPUs) games, artificial intelligence (AI), and digital platforms operate on.

NVIDIA could profit from Self-Driving Trucks

Moreover, NVIDIA manufactures the building blocks for the “brains” of autonomous vehicles and robots. To explain, NVIDIA builds both the hardware (GPUs) and software (the NVIDIA Drive Scalable AI Platform for Autonomous Driving) self-driving vehicles need to operate.

The adoption of autonomous vehicles is growing fast. For instance, a company called TuSimple is launching the first network of self-driving trucks, Recode claims. Recode claims TuSimple has 22 customers for autonomous semis including UPS (NYSE: UPS) and major shipping company US Xpress.

TuSimple hopes to launch a nationwide autonomous shipping network by 2020. I think NVIDIA could make enormous of money from autonomous trucks because there are almost two million semi-tractors in the United States, HDS estimates.

How Much Money is NVIDIA Making?

NVIDIA makes enormous amounts of money now. For instance, NVIDIA reported a $2.004 billion quarterly gross profit and a $976 million operating income on 30 April 2020.

However, those numbers were down from $2.015 billion and $990 million on 31 January 2020. Additionally, NVIDIA’s quarterly revenues fell from $3.105 billion on 31 January 2020 to $3.08 billion three months later.

Yet, Stockrow estimates NVIDIA has an incredible revenue growth rate. Stockrow reports NVIDIA’s revenues grew by 40.82% in the quarter ending on 31 January 2020 and 38.74% in the quarter ending on 30 April 2020.

Plus, NVIDIA’s quarterly common net income fell from $951 million on 31 January 2020 to $917 million on 30 April 2020. Thus, NVIDIA makes enormous amounts of money.

NVIDIA Generates Enormous Amounts of cash

Best of all, NVIDIA (NASDAQ: NVDA) generates enormous amounts of cash. Incredibly, NVIDIA reported a quarterly ending cash flow of $15.494 billion on 30 April 2020.

That ending cash flow rose from $1.131 billion on 31 January 2020. Plus, NVIDIA reported a financing cash flow of $4.744 billion and an operating cash flow of $909 million on 30 April 2020.

Therefore, the NVIDIA money machine is still generating enormous amounts of cash. Consequently, NVIDIA had $16.354 billion in cash and short-term investments on 30 April 2020. The cash and short-term investments grew from $10.897 billion on 31 January 2020.

Thus, NVIDIA’s business generates enormous amounts of cash. Hence investors seeking a cash rich company need to investigate NVIDIA.

NVIDIA demonstrates it can generate prodigious amounts of cash and revenue growth from existing businesses such as games. Therefore, I think the notion that NVIDIA could make enormous amounts of money from autonomous vehicles is a realistic notion.

Is NVIDIA the Best Dividend Stock in Silicon Valley?

I think one reason for NVIDIA’s popularity is its dividend. Notably, NVIDIA (NASDAQ: NVDA) paid a 16₵ quarterly dividend on 4 June 2020.

Thus, I think there is room for tremendous dividend growth at NVIDIA. NVIDIA is a dividend payer that generates enormous amounts of cash. Thus, NVIDIA can grow its dividend and pay a dividend for many years to come.

Overall, NVIDIA offered an annual dividend of 64₵ and a dividend yield of 0.15% on 13 July 2020, estimates. Thus, NVIDIA could be the best dividend stock in Silicon Valley.

An Alternative to the FANG

In fact, the dividend is why I made NVDA part of my NAMPOF alternative to the FANG. To explain, the NAMPOF consists of NVIDIA (NASDAQ: NVDA), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), PayPal (NASDAQ: PYPL), Oracle (NYSE: ORCL), and Facebook (NASDAQ: FB).

I recommend the NAMPOF stocks because I think we undervalue them compared to the FANG. The FANG comprises Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Google (NASDAQ: GOOG). Google is the old name for Alphabet (NASDAQ: GOOGL). The FANG is a list of high-growth technology companies that can generate a lot of cash.

However, I think NVIDIA shows the NAMPOF offers high share value growth potential. Hence, the NAMPOF is list of income stocks with high-growth potential. Therefore, both NAMPOF and NVIDIA could be good long-term income investments.

I advise all investors who need income and share growth to investigate NVIDIA and NAMPOF. Those stocks could be good for ordinary people and retirees because they grow and generate cash.