What’s Behind Nvidia Stock’s 5x Rise Since Late 2018?

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Nvidia Corporation (NASDAQ:NVDA) The stock’s price has risen 5 times from $33 at the end of 2018 to about $167 currently, primarily due to its selloff and a favorable turnaround in the P/S multiple. During this period, the company saw a strong 130% increase in revenue, and with its P/S multiple rising by more than 80%, the company’s share price has soared despite a slight increase in the outstanding share count. Furthermore, over the same period, the S&P 500 returned nearly 60%, meaning that the NVDA stock has managed to outperform the index strongly since the end of 2018.

In our interactive dashboard, Why Nvidia Stock Moved: NVDA stock is up 400% since 2018We break down the factors behind this move.

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NVDA’s total revenue grew by 130% from $11.7 billion in FY19 to $26.9 billion in FY22

  • NVDA’s total revenue initially declined from 11.7 billion in FY19 to $10.9 billion in FY20, but demand has picked up as the pandemic and sales strengthened to $26.9 billion in FY22, and the current (NVDA’s financial year ends in January).
  • Nvidia is a major player in the GPU market, with its sales being driven by gaming processors and data centers.
  • Nvidia’s largest segment is the graphics segment, bringing in $15.9 billion by fiscal ’22, accounting for about 59% of the company’s total sales.
  • For additional details about NVDA’s revenue and peer comparison, visit nvidia revenue comparison

Revenue per share grew 124% from $4.81 in fiscal 2019 to $10.75 currently

  • NVDA revenue grew from $11.7 billion in fiscal 2019 to $26.9 billion currently, while the number of outstanding shares increased from 2.4 billion in fiscal 2019 to about 2.5 billion currently.
  • Due to this, RPS has jumped more than 2x from $4.81 in FY19 to $10.75 currently.

The price-to-sales (P/S) multiplier for NVDA increased from 14.8x in 2019 to 52.1x by the end of 2021, but is currently back to 15.5x, still slightly higher than 2019 levels .

  • NVDA’s P/S multiple grew strongly to approximately 52.1x by the end of 2021, fueled by rising investor expectations around increased demand for its graphic processors, driving the company’s sales growth.
  • However, due to current geopolitical tensions and increasing economic uncertainty on the broader markets, the P/S multiple has returned, which currently stands at around 15.5x.
  • For additional information about the company’s stock returns and peer comparison, see nvidia stock return comparison,

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