Is the party over for Nvidia (NASDAQ:NVDA) stock investors in 2023? Not likely, as the demand for artificial intelligence (AI) chips hasn’t evaporated and Nvidia is still a powerful revenue generator. Sure, the company will face challenges. Don’t give up on Nvidia, though, as 2024 could be as good as 2023 or even better for the company’s loyal shareholders.
It’s an easy decision for us to give Nvidia stock an “A” grade, especially after perusing through the company’s stellar earnings results. So, let’s delve into the details and remind ourselves of why Nvidia is a market darling and a tech hardware juggernaut.
Why Did NVDA Stock Fall After Earnings?
It was one of the most closely watched earnings events of the year on Nov. 21, when Nvidia released its financial results for the third quarter of fiscal 2024. The next day, Nvidia stock fell roughly 3%.
Does this mean NVDA stock is headed for a bear market? Not at all. Nvidia posted excellent quarterly results, but more on that topic in a moment.
First, to be completely fair and balanced, we must acknowledge Nvidia’s challenges in China. A couple of months ago, the U.S. government imposed restrictions on Nvidia’s exports of certain AI-compatible processors to China.
Chief Financial Officer Colette Kress reportedly expects that U.S. restrictions of these chips to China and other regions will cause Nvidia’s sales to those regions to “decline significantly.”
This is certainly an issue to consider, though Nvidia has released different, compliant AI processors to export to China. Furthermore, per Barron’s, Kress assured that strong demand from other regions will “more than offset” the shortfall of AI chip sales to China and other restricted areas.
Bet on the Godfather With Nvidia Stock
The market was unprepared for negative Nvidia news in the near future. This explains the decline in Nvidia stock. Nonetheless, the company is financially strong.
Just take a glance at Nvidia’s third-quarter fiscal 2024 results and you’ll surely agree. Wall Street expected Nvidia to report $16.2 billion in revenue and earnings of $3.37 per share, but the actual results were $18.1 billion in revenue and earnings of $4.02 per share.
Looking to the current quarter, Nvidia now expects to generate revenue of $20 billion plus or minus 2%. That sales outlook came in above the analysts’ consensus estimate of $18 billion in revenue.
Wedbush analyst Dan Ives undoubtedly had these data points in mind when he declared Nvidia remains the “Don Corleone of AI.”
Of course, that’s a reference to the all-powerful Mafia boss of the original Godfather film. Considering Nvidia’s quarterly report, Ives concluded that “monetization is now here, use cases are exploding,” and the “China worries were overblown and I think contained.”
Don’t Let Export Restrictions Shake You Out of NVDA Stock
Nvidia is the Godfather of the U.S. AI-compatible processor industry. So, why park your investable capital with a lesser competitor? It just makes sense to stick with Nvidia stock.
We would never tell you what to buy, but the bull case for Nvidia greatly outweighs the concerns over export restrictions to China. Therefore, NVDA stock easily earns an “A” grade and has plenty of room to potentially run higher in 2024.
On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
