NVDA Stock Prediction for 2019: Nvidia Has Obvious Tailwind From Fast-Growing Robotics Industry

NVDA Stock Prediction

Summary:

  • There is still almost-zero demand for graphics accelerator cards from the cryptocurrency mining industry. Ethereum’s crypto currency price is now only $125.42.
  • On the other hand, I see the growing robotics industry to gradually become an important catalyst for Nvidia. The new Jetson AGX Xavier module is the best brain for robots.
  • Unlike the speculative and very volatile cryptocurrency mining business, the entire global robotics industry can grow to a market size of $498.6 billion by 2025.
  • NVDA is clearly oversold due to investors putting too much emphasis on the non-permanent decline of cryptocurrency mining.
  • NVDA is attractively priced at the moment. It now trades at only 17.77x P/E and 8.57x P/B.

Long-term growth investors know that averaging down on Nvidia (NVDA) is the right move. Why my NVDA stock prediction is bullish?

Nvidia is an early leader in semiconductor products for the growing robotics industry. As far as I know, there is still no lawfully allowed commercial autonomous car operating in the world. Nvidia’s Jetson push has better growth opportunities in robotics.

It was reported that Nvidia’s new $1,399 Jetson AGX Xavier system-on-module (SoM) was designed to give robots better brains. It is now being marketed as the best computer for autonomous machines (not just cars). AGX Xavier could help manufacturers build smarter assembly/warehouse robots to increase their production rate.

(Source: Nvidia)

Unlike previous generation of Jetson modules (which focused more on datacenter/deep learning acceleration), AGX Xavier is primed to work for artificial intelligence-centric edge computing. To get more productive robots, they need better edge computing capabilities. Instead of relying on cloud servers, edge computing will help robots use their built-in processors to process/analyze data so they can accomplished their programmed tasks faster. This month’s release of Jetson AGX Xavier is perfect because the robotics industry is projected to have a market size of $498.6 billion by 2025. A large part of that market spending will go to the purchase of robotics-centric processors like the Jetson AGX Xavier.

(Source: Statista)

Xavier is a palm-size autonomous machine AI processor, but it has the compute power of a datacenter-level server processor. Its peak Artificial Intelligence processing performance is 32 TOPS (Trillion Operations Per Second).

Real-world tests showed that the Xavier has 8x better GoogleNet INT8 performance-per-watt than its predecessor, the Jetson TX2.

(Source: Phoronix.com)

Robotics Hardware, Like PC Gaming, Will Be Consumer-Focused

My fearless forecast is that three years from now robotics could add $2 billion in new annual revenue for Nvidia. The rapid growth of the robotics business is now fueled by non-industrial applications. Consumer-centric robots (such as domestic helpers, unmanned aerial vehicles, personal assistants, and farm workers) will account for more than 80% of the robotics industry. Like Statista, Tractica also expects the robotics market to grow to $500 billion by 2025.

The affordable price tag of Nvidia’s Jetson AGX Xavier module could make it the go-to choice for consumer robot manufacturers like Aeolus and Miso. Buying a $3,500 Nvidia-powered robot that can clean the toilet and your entire house is a no-brainer. Buying household chores-capable robot is cheaper than hiring human domestic helpers.

Even here in the Philippines, most household help cost around $200 to $300 per month in salary & social/health insurance benefits. Unlike robots, you also have to feed human household helpers. Feeding one house maid can add another $60 to $100 in monthly expenses. Human helps, unlike robots, also have the tendency to get sick/tired or go lazy (Facebooking all the time when their bosses are not around to supervise them).

Why It Matters

Taking pole position in robotics application processors can help NVDA bounce back to its 52-week high of $292.96. This year’s massive decline in Ethereum’s currency price got abused by the sell-side community. They used the decline of GPU-centric cryptocurrency mining to spread panic and pummel down the stocks of Nvidia and Advanced Micro Devices (AMD).

These companies have less than 20% exposure to cryptocurrency mining and yet their stocks lost more than 100% of their market value over the last six months. It is unfair to Nvidia and AMD but that’s how the stock market works. Both these companies were unjustly punished by profiteers who exploited the cryptocurrency mining bust. From trading as high as $1,397 in January, Ethereum’s cryptocurrency is now only priced at $117.42.

(Source: coinmarketcap.com)

Conclusion

NVDA is a buy. Nvidia has tons of cash (more than $7.5 billion) and the stock was unjustly oversold. NVDA is very affordable right now. It only trades at 17.77x P/E and 8.57x P/B. The fast-growing robotics industry is a much bigger market for Nvidia’s graphics processors and ARM-based computer processors. Robotics applications processors can handily replace the lost tailwind from cryptocurrency mining.

NVDA is certainly a cheaper (and safer) long-term investment than AMD.

 (Source: Seeking Alpha)

My optimism over NVDA is also backed by its very bullish one-year market trend forecast from I Know First.

How to interpret this diagram

Past I Know First Forecast Success with NVDA

I Know First has been bullish on NVDA shares in past forecasts. On August 15, 2017, an I Know First algorithm issued a bullish 1 year forecast for NVDA with a signal of 266.19 and a predictability of 0.68, the algorithm successfully forecasted the movement of the NVDA share.  After the forecast has been published, NVDA shares have risen 55.68% within 1 year in line with the I Know First algorithm’s forecast. See chart below.

(Source: Finance Yahoo)

This bullish forecast for NVDA was sent to I Know First subscribers on August 15, 2017.

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