Recent movements on the market show that the prices of shares of tech-giant, Nvidia is down 5.7%. For the past few months, the prices of the shares of the company have been increasing significantly, the current downtrend is influenced by several factors on the market.
The Price/Earnings ratio of the company stands at 87.13, because of which, it is not a surprise that the prices of the shares of Nvidia are down. This ratio is very high, which means that right now, the shares of the company are not worth buying. Generally, it is better to buy shares when the P/E ratio is around 20. As of now, the prices of the company are still high, however, the trend shows that the 5-day change of the prices of the shares of the company re down 35.91, which is about 6.64%.
In terms of fundamentals, the market capitalization of the company is as much as 311,634,368, annual stales stand at $10,198 m, and annual income at $2,796 m. The annual dividend and yield of Nvidia are 0.64, which is 0.12%. Historically, the chip industry in the United States have been a mix of several players, the market was divided into two parts, midsize companies, and Intel. However, this year, it seems like the trend is somewhat changing.
Because of the current situation on the market, representatives of top stock brokers on the market are claiming that traders continue to invest in AMD and Nvidia, as market experts are claiming that the companies might become more relevant on the market.
Prices of Nvidia Over the Last Few Months
As the chart shown above indicates, the prices of the shares of the company have been increasing significantly for the last few months, which is one of the major reasons why the P/E ratio of the company is so high. The prices have been on a rise since the end of the last year, after which, in March, because of the Stock Market Crash 2020, caused by the Covud-19 pandemic, the prices went down. However, it quickly regained momentum and was on a steady increase until the end of August.
At the beginning of September, the prices of the shares of the company went down a lot after a steady increase. After this, however, the uptrend was somewhat continued up until October. Right now, the prices of the shares of the company are down again, however, it is a very natural thing to happen. Since the P/E ratio of the company is so high, not so many investors are buying the shares.
Compared to March of 2020, the prices of shares of the company are more than doubled, which is a very impressive increase. One of the main reasons for it is the fact that because of the Covid-19 pandemic, the demand for chips has been increased a lot. Because of this situation, companies such as Nvidia and AMD are doing very well on the market.
AMD and Nvidia are facing some challenges, however, which could end up in several different ways. Both Nvidia and AMD are doing very well on the market, compared to the begging of the year, the shares of AMD are up almost 80%, while the prices of shares of Nvidia are almost doubled. The changes that are happening on the market might help Nvidia and AMD to stand at the same level as Intel, however, there still are a lot of things that have to happen.
USA also has some other companies on the market that are huge competition for chip manufacturers. One of them is Qualcomm, and Texas Instruments, both of these companies have market value which is higher than AMD’s. These two companies, however, mostly focus on different markets, Qualcomm is focused on mobile devices, while TI’s chips mostly rely on real-world signals.
On the other hand, Intel has been known as the industry leader int he country, but this trend is changing a little nowadays because of some manufacturing missteps, also, the company has announced earlier that the manufacturing of the new generation of chips had been fallen behind, which puts Intel behind of world’s top manufacturing companies. All of these are happening while other companies on the market are offering people around the world new and well-developed technologies, which puts Intel under a huge pressure.