Stock market investors with a long-term vision can surely pick Nvidia stocks because, by all measures, the company has gained high trust among investors. Investors can bank on the company to buy its stocks to create a winning strategy in the long term, even if it means paying more. As of December 2021, the company’s stocks had gone up by 140% year on year. The stocks are so strong that over the past three years, they gained 750%. Over the years, the company transformed from being a GPU provider for PC gamers to providing systems for artificial intelligence services and high-performance computing. Whether to buy hot tech stocks can put investors in a fix. They must weigh the risks between high returns from high revenue and expanded margins in the long term against the possibility of a collapse due to sub-par performance.
What to consider before buying Nvidia (NVDA) stocks at a high price?
Any stock market investors know how to evaluate a company’s performance by looking at the numbers and comparing them with a few years ago to gauge the growth rate. The reason behind the surge in Nvidia stock price is its continued improved performance since 2019. In January 2019, Nvidia’s price to earnings ratio (P/E) was less than 25 that stands at 96 today, almost a four-fold rise. While strong business growth is one of the reasons for pushing up the P/E dramatically, the other reason is that its shares were selling at a high premium due to high investor confidence.
Gaming and data centers have been the two most significant growth segments, and the revenue trebled during this time. Expanding margins is another reason for driving the stocks high. Over the last ten years, Nvidia’s gross margin has increased steadily over the previous ten years due to increased sales of powerful and costly graphic processors used for gaming and data centers.
The Himax Technologies stock is another good choice for investors who enjoy long-term gains.
An introduction to Himax Technologies (HIMX)
The name of Himax Technologies might not excite investors because of its limited familiarity among them. Except for the avid share market watchers and some seasoned investors, not many people discuss the company from an investor’s perspective. The share price of the company belonging to the small-cap segment saw considerable price movement during the recent months on the NASDAQ. The himax technologies stock price saw a high of $14.65 and a low of $9.79, and it could provide investors an excellent opportunity to include the stock in their portfolio at a lower price. However, investors must consider if the current trading price reflects the actual value of the small-cap stock.
The Taiwan-based company manufactures fables semi-conductors engaged in Display driver ICs (integrated circuits) and timing controllers for laptops, monitors, televisions, digital cameras, car navigation, tablets, phones, and other consumer devices. Its competitors include Marvel Semiconductor, Qualcomm, Media Tek, and Micro Vision.
What to consider before buying HIMX stock?
By using the PE ratio as the primary indicator to judge the viability of the current stock price, some market experts look at it as an opportunity to pick up HIMX stock that is trading at a lower price. However, you must keep in mind the volatility of HIMX shares, and there are possibilities of the price falling further and providing another chance for buying.
What are the growth prospects?
Growth-oriented investors should always consider the outlook or future before buying any stock. HIMX could be a great company to invest in because of its robust view and low price. Over the next few years, its earnings are likely to increase by 46%, translating into healthier cash flow that will push up the share prices.
Although it does not make sense to compare Nvidia and Himax, both company stocks can be rewarding for investors in the long term. It’s true for both potential investors and present shareholders.
