Jensen Huang Said Nvidia Now Has "a Lot Greater Visibility" Into Demand, Letting It Forecast a Full Year Ahead for the First Time Ever. Does That Confidence Justify Nvidia's Premium Valuation?
Nvidia may look expensive compared to the S&P 500, but there's a good reason investors are willing to pay more to own the stock.
Overview
Nvidia's (NASDAQ: NVDA) graphics processing units (GPUs) are the foundational hardware that is powering the artificial intelligence (AI) revolution. Along with its leading position in advanced GPUs for AI, the company is also building its position in central processing units (CPUs) and other hardware used in data center tech stacks.
As a result of very strong demand for its AI-focused hardware products, the company made an unprecedented move with its latest quarterly report: It issued guidance for the subsequent fiscal year. CEO Jensen Huang cited having "a lot greater visibility" into its demand outlook as the reason for the move. Does this mean that Nvidia stock deserves to trade at premium valuation?
Image source: Getty Images.
Details
Source
Originally published at www.fool.com.