Every business faces obstacles to growth. Roadblocks along the way happen all the time. The most successful companies remain innovative enough to adapt to changing market conditions. They remain diversified enough to create additional revenue streams. The best of the best tend to thrive in tough times, while their competition continues to waver with unstable market conditions. Recently, Nvidia is continuing to comeback thanks to the Bitcoin and the entire cryptocurrency market.
Winners (and losers) in the cryptocurrency industry know all about navigating through rocky waters. Some companies made it through the turbulent times while others found themselves grounded and out of the game.
How Does Nvidia Use Cryptocurrency To Make A Comeback?
As a major player in the semiconductor industry, its recent fortunes have been tied to tough market conditions. This has wreaked havoc on the company’s stock values in recent years. However, investors that are familiar with Nvidia’s business practices have not been deterred.
The trouble first started with the crypto-mining crash in 2018. This downturn caused excessive inventory along with declining sales. Nvidia was one of the hardest-hit companies due to a heavy reliance on graphics processing units (GPU’s).
GPU’s are instrumental in competitive gaming applications. They are also a big part of data centers and the automotive industry. The lack of a viable market for computer processing units (CPU’s) exaggerated this situation.
That part of the market is starting to bounce back. Key company performance indicators have improved since last year. Revenue has yet to fully bounce back. Yet, most of the vital numbers are heading in the right direction.
How The China Trade War Affects The Company
After weathering that storm, Nvidia was caught in the middle of the ongoing trade war with China. Sales rely heavily on the Chinese market. The escalating trade war rhetoric has created additional uncertainty for the semiconductor industry.
The net result of both of these issues is major fluctuations in stock prices. Once on the path to a market value of $300 a share, NVDA did an about-face. The decline from the 2018 high stands at 32 percent. It started 2019 at a 52-week low of $124.46.
This company and this industry has proven itself to be resilient during this same time frame. Most analysts remain bullish on Nvidia stock prices. According to TipRanks, NVDA is considered a moderate buy. A group of 20 different financial analysts issued a buy rating. The average target price is set at $189.27. This is still way off those $300 share projections, but moving in the right direction.
The trade war are still potential rough waters that will have to be navigated around. This is more of a long-term perspective for investors. The company’s financial fundamentals are sound. Its products are well received in the marketplace. Most signs do indicate that the chip makers can turn things around.
One big positive has been increased market share in the automotive industry. Revenue grew by 30 percent during the most recent quarter. A small percentage of the current mix, self-driving vehicles could become the company’s primary growth engine in years to come. Gaming revenue is also on the rise as another positive business indicator.