Pros, Cons to Buying Nvidia Stock - Chevy Chase Trust

Pros, Cons to Buying Nvidia Stock

From U.S. News and World Report: Nvidia Corporation (Nasdaq: NVDA) has quite a story to tell and investors seem to be all ears these days — with good reason.

Nvidia bills itself as a pioneer that has “supercharged” a form of computing loved by the most demanding and eclectic computer users in the world — scientists, designers, artists, and gamers. For them, NVDA has “built the equivalent of a time machine,” the company states on its website.

“Nvidia has over $5 billion of net cash and investments on its balance sheet, despite having spent a cumulative $15 billion in R&D, funding numerous startups via its venture program, and is just completing a massive new state-of-the-art headquarters,” says Bobby Eubank, equity research analyst at Chevy Chase Trust. “Nvidia has done this by generating close to $3 billion in free cash flow last year via high revenue growth with nice margin expansion.”

Of the $3 billion in free cash flow, $1.25 billion was used for dividends and stock repurchases, Eubank adds.

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