Santa Clara, CA-based technology giant Nvidia Corporation (NASDAQ: NVDA) has made significant strides in the artificial intelligence (AI) space. Besides solidifying its footprint in the designing of graphics processing units (GPUs) and application programming interfaces (APIs) for data science, the company has emerged as a major player in the burgeoning semiconductor manufacturing industry.
Recently, the company reported impressive first-quarter results. In the quarter, its earnings stood at $1.36 per share, up 49% year-over-year, and revenues climbed 46% from the year-ago quarter to $8.29 billion.
According to TipRanks, shares of Nvidia have declined more than 37% year-to-date and 12.3% in the last three months. Taking this into account, let’s discuss some of Nvidia’s major risk factors.
Risk Factors
As per the TipRanks Risk Factors tool, Nvidia’s top risk categories are Finance and Corporate and Tech and Innovation, which contribute five risks each to the total 24 risks identified for the stock.
Under the Finance and Corporate risk category, Nvidia informs its stakeholders that risks arising from share price and shareholder rights are the major headwinds for the company.
The company highlights that the activities of various shareholder advocacy groups, certain institutional investors and investment funds are focused on the company’s ESG practices. Further, the company opines that any deviation from the company’s stated ESG standards can materially impact its business operations.
Meanwhile, the company’s primary risk within the Tech and Innovation category remains Innovation/ R&D.
Nvidia underlines that it operates in a dynamic industry and any slacking in terms of innovation, design or new products may hurt its revenue and financial condition. Further, the company says, any massive disruption or technological advancement for which it did not prepare adequately can impact its business.
Stock Rating
Recently, Wells Fargo analyst Aaron Rakers reiterated a Buy rating on the stock with a price target of $250, which implies upside potential of 33.6% from current levels.
Overall, the Street has a Strong Buy consensus rating on the stock based on 27 Buys and five Hold. NVDA’s average price target of $271.41 implies upside potential of 45% from current levels. Shares have gained 6.3% over the past year.
Conclusion
Nvidia’s primary risk factors have the ability to hurt its operations. However, its fundamentals remain solid as it continues to thrive in various businesses.
Read full Disclosure
