NVDA Stock Forecast: COVID-19 Is Also Boosting Nvidia’s Topline

motek 1This NVDA stock forecast article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.


  • It is irrational that investors keep pummeling down Nvidia’s stock due to their growing fears over COVID-19.
  • Yes, Nvidia relies on Chinese factories to build its products. However, China’s manufacturing index for March 2020 showed an expansion.
  • The China-centric supply chain problem that fabless firms like Nvidia probably faced due to COVID-19 is no longer valid.
  • Nvidia’s stock is again trading below $245. It still touts a YTD gain of +3.3% but it is now priced well below its 52-week high of $316.32.
  • There a huge surge in video game activities due to COVID-19 quarantines. Gaming is Nvidia’s biggest moneymaker. We should expect the Gaming segment to generate record revenue this quarter.

Nvidia’s (NVDA) stock saw another huge -7.8% dip on April 1. This is likely due to the White House/Trump acknowledging that the COVID-19 death toll in the U.S. could hit reach 100k to 240k. This terrible admission only exacerbated the already negative emotions of investors. Nevertheless, I expect Nvidia’s stock to rebound back to above $300 before June. Panicked investors will eventually return to their senses. COVID-19 quarantines are actually a good boost to Nvidia’s $1.49 billion/quarter Gaming segment.

(Source: TradingView)

The persistent pessimism is uncalled for. Yes, Nvidia relies on Chinese factories to assemble/manufacture its semiconductor products. However, China has overcome the COVID-19 pandemic and it is already back in business. The chart below showed China’s official manufacturing PMI (Purchasing Manager’s Index) grew last March. The drop in February was because of the quarantine-induced closure of China factories. Going forward, investors should stop thinking that Nvidia has a supply-chain problem due to COVID-19.

(Source: CNBC)

The reality now is that Nvidia’s production of PC and server-grade graphics processors is not hampered by COVID-19. Retail stores are shuttered in many countries imposing quarantines. On the other hand, online retailers still operate and deliver to quarantined customers. For example, it is still easy for me to purchase a video card or PC processor from Lazada Philippines. There is an online shopping boom due to COVID-19. The only downside here in the Philippines is that deliveries of online retailers take more than a week now because passenger airplanes aren’t flying.

The point is PC builders/vendors can still get enough units of GeForce video cards. Consequently, Nvidia can keep its sales numbers growing while we endure the COVID-19 pandemic. The work-from-home edicts of many companies also likely help boost sales of data center-centric products of Nvidia. The added burden of connecting at-home workers with corporate servers can use compute accelerators like Nvidia’s very affordable $6,000 Tesla P40 GPU. More affluent companies will probably go for the $8,800 Tesla V100 GPU compute accelerator just to make sure the cloud collaboration of quarantined employees goes smoothly.

Expect Stronger Revenue

My fearless NVDA stock forecast is that the first and second quarters of 2020 will help Nvidia’s Gaming segment earn more than $1.5 billion/quarter. This is due to the obvious surge in video game activities from billions of people being quarantined to stay at home. The work-from-home initiatives of many companies will also force them to buy more powerful laptops/computers for use by their employees at home.

For example, a CAD draftsman or a video editor will demand a more powerful at-home computer so he/she can replicate office-level productivity. A sub-$500 GPU like the Nvidia RTX 2070 is just chicken-feed for many companies willing to keep their best CAD artists happy (while working from home).

(Source: Amazon.com)

The World Health Organization already endorsed playing video games as a great way for people to stay connected while they are quarantined at home. Playing multiplayer online games keeps people in touch while they maintain physical distances. Playing Switch and PC games will keep people safe from the new coronavirus. Companies are giving their works paid leaves for as much as long as two weeks. Other firms are paying their employees to work-from-home.

In other words, gamers still have the extra money to buy new or better GeForce video cards for their gaming PCs. Some quarantined people who never play video games will also be compelled to sign-up for Nvidia’s $4.99/month cloud gaming service, GeForce Now.  For people with access to internet speed of at least 15mpbs, GeForce Now is the best cloud gaming service.


The sell-off due to the lingering investor fears over COVID-19 has made NVDA more affordable to own. This stock now trades at 43.13x Forward P/E GAAP valuation. This valuation ratio is lower than Advanced Micro Devices (AMD). Going forward, Nvidia will remain far more profitable than AMD will be.

Nvidia Stock Forecast
(Source: Seeking Alpha)

Another near-term tailwind is that Chinese regulators will likely approve Nvidia’s $7 billion offer to buy Mellanox (MLNX). The high-speed Ethernet and data center switches of Mellanox will allow Nvidia to rely less on GPU sales. It will also help Nvidia disrupt the business of Cisco (CSCO). Go long on NVDA because its data center business will no longer be limited to deep learning GPUs and accelerators. It also wants to go after the multi-billion data center switch market. This niche industry was worth $12.86 billion/year in 2016. It is growing at a CAGR of 10.1% and it will be worth $28.70 billion by 2026.

My buy rating for NVDA is supported by its super bullish one-year forecast score from I Know First stock algorithm. NVDA’s score of 795.07 is well above the 100 threshold limit for a stock to get a bullish signal from I Know First. More importantly, I Know First has a very high 0.83 predictability score for NVDA’s one-year trends. I Know First has a great history of correctly predicting the one-year performance of Nvidia’s stock.

Nvidia Stock Forecast

How to interpret this diagram.

Past Success With NVDA Stock Forecast

I Know First has been bullish on NVDA’s shares in past forecasts. On November 19, 2019, the I Know First algorithm issued a bullish forecast for Nvidia stock price. This algorithmic trading tool successfully forecasted the movement of the NVDA in the past – in three months, Nvidia stock price has risen by 48.25% in line with the I Know First algorithm’s forecast. See the chart below.

Nvidia Stock Forecast
Nvidia Stock Forecast

This bullish NVDA stock forecast was sent to the current I Know First subscribers on November 19, 2019.

Here at I Know First, one of the top fintech companies in the industry, our algorithm has modeled and predicted assets price movement worldwide for short-term and long-term time horizons, ranging from 3 days to a year. Since 2011, we have been providing daily forecasts, currency predictionsgold predictions, world indices predictions, and, in particular, Apple stock predictions. Today, we are producing daily forecasts for over 10,500 assets. This stock market forecast generated by our predictive tool is used by institutional clients, as well as private investors and traders to identify the best investment opportunities in the market. The tool is based on Artificial Intelligence, generating stock market predictions on a daily basis.

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Please note-for trading decisions use the most recent forecast.