A few months back, analysts and readers weighed on the top stocks they thought would earn the highest returns in 2022. We all voted Nvidia (NASDAQ: NVDA) as the preferred stock for the year that followed two years of consecutive growth in which NVDA stock grew by more than a third.
However, NVDA stock is hurting with a 17% decline to date (YTD) and leaving some to question whether it will be able to make up the difference over the next third quarter of this year.
It’s no surprise that the past three months haven’t been exactly as anyone had planned, and investors and society have had to be unsure of the next steps. The oil price skyrocketed with an escalating Russian invasion of Ukraine, and inflation rose to levels that haven’t been seen in a while. We are yet to see a resolution to the shortage of chips and production bottlenecks.
Therefore, even though Nvidia stock is falling, it’s not difficult to interpret it as an element of the wider decline in stock prices. In the end, if all the other stocks are performing poorly, why should Nvidia be too? If that’s the scenario, then Who can make a case that those who own NVDA stock should sit down and wait for the decline won’t last forever, surely?
To tackle this question, let’s first try to determine the extent to which Nvidia performs compared to the other market players and then examine the catalysts I found before the start of the quarter that investors are thrilled about. After that, let’s get into it and look more closely at NVDA stock.
How Is the Nasdaq Doing?
Nvidia is among seven stocks listed on the Nasdaq that have a market cap of at least $500 billion, in addition to Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOG, Google, NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Tesla (NASDAQ: TSLA) and Meta (NASDAQ: FB).
In the overall picture overall, the Nasdaq Composite is an index that covers almost every Nasdaq stock — is down over 11% year-to-date. The reasons that companies choose to list their shares on one exchange over different ones are intricate and distinct for every company. However, generally, the Nasdaq is more technologically-oriented than another important American exchange, the New York Stock Exchange.
If the Nasdaq is down 9.9%, that would be a sign that a number of the top hitters are down in the same amount.
But not quite. Nvidia’s 17% decline in the first quarter of this year is similar. It’s also Microsoft has dropped almost 11% YTD is also close. But, Tesla is down about 1% year-to-date, Apple is down 3.2 percent, and Amazon is nearly 5 percentage points lower. Alphabet is down nearly by 6%. However, the biggest outlier is Meta, which is down more than 34% after a disappointing earnings report.
If, for instance, you’re a major corporation on the Nasdaq and you’re not Facebook, Nvidia or (arguably) Microsoft, reports of your demise are exaggerated. Therefore, if and when growth is seen to be positive for the entire market, all the other companies will get an advantage.
What Is Nvidia Doing Now?
In my article on the company’s plans for 2022 this year, I observed that readers were enthusiastic about what they saw as the virtual world and electric cars (EVs) and that Nvidia could play a key part in both areas. With this in mind, there’s good news for anyone who believes that those areas are crucial to the future of Nvidia.
In the spring of this calendar year, Nvidia revealed new capabilities that Who will add to the Omniverse platform. According to the company’s description, Omniverse is “a multi-GPU-enabled open platform for 3D design collaboration and real-time physically accurate simulation”. In a blog post released in late 2012, Nvidia described how Omniverse could be used to create metaverse environments. In addition, Nvidia outlines how metaverse applications may provide real-world benefits, such as optimizing how Who could build 5G networks in urban environments.
Furthermore, Nvidia continues to work with electric automobile companies to assist them in improving the quality and performance of the software. With this in mind, oil prices continue to climb and rise; it’s up to 6 times more affordable to drive an electric vehicle than a gasoline-powered vehicle within the U.S. Many drivers will be thrilled to choose vehicles powered by Nvidia technology next weeks and even years.
Together together, with the metaverse tailwinds as well as activities that are in the EV market, Nvidia has plenty of catalysts to come. Additionally, NVDA stock could bounce after its initial woes.
Where Are Nvidia and NVDA Stock Headed This Year?
It’s hard to argue that the initial 3 months in 2022 haven’t drastically changed the amount that the average person is involved in the metaverse realm. You likely spent no time in any advanced metaverse in the year. Just because the gas prices are high doesn’t mean that everyone will rush to purchase the most recent EV today.
They’re factors that can trigger NVDA stock; however, they’re also long-term catalysts. The market usually responds to catalysts that last a long time. However, it also reacts to events that have been happening previously. The best chance Nvidia can have at seeing its stock price climb could be amazing earnings. The moment Nvidia announced its quarterly earnings, which surpassed expectations, its stock price fell because it beat expectations.
Yet, Nvidia still gets to make earnings reports three times throughout the year. So we’ll be able to learn within the next couple of months or so what the company’s doing in the last quarter, and that could be where the true solution lies for the company.
If you’re an investor in NVDA stock, hold and ride.