Stocks to buy

Now Is the Time to Double Down on NVDA Stock (Not Take Profits)

It’s no secret that Nvidia (NASDAQ:NVDA) has been a major winner in the tech sector this year. This raises an important question, though: Can NVDA stock maintain its momentum in 2023? I’ll answer that question with an enthusiastic yes, as Nvidia is making significant strides as a supplier of essential hardware for modern supercomputers.

People already recognize Nvidia as a provider of next-generation graphics processing units (GPUs) for gaming consoles. Plus, Nvidia is in favor on Wall Street because the company develops hardware for artificial intelligence (AI) applications.

There’s more to Nvidia’s growth story, however. As we’ll discover, Nvidia is a major player in the supercomputer movement of the 2020s. So, don’t expect the market’s enthusiasm for Nvidia to subside anytime soon.

It’s Wrong to Assume That NVDA Stock Is in a Bubble

I can understand the reluctance of value-focused investors to buy NVDA stock now. After all, it has doubled in price since the beginning of the year.

Bear in mind, though, that Nvidia’s share price can continue to run higher as long as the company innovates and provides value. Hence, you can tune out the media’s chatter about bubbles if you still believe in Nvidia as a disruptive company.

For one thing, Nvidia is still a leader among gaming GPU makers. The company recently released its GeForce RTX 4060 lineup of GPUs, some of which start at the surprisingly reasonable price of $299. Plus, Nvidia continues to advance hardware for AI applications, and this has prompted NVDA stock price-target hikes from the likes of Oppenheimer analyst Rick Schafer and Susquehanna analyst Christopher Rolland.

Nvidia Develops Leading-Edge Supercomputer Hardware

In addition to all of that, Nvidia has been staking its claim as a prominent developer of hardware for supercomputers. For instance, Nvidia recently revealed a supercomputer built on the company’s Grace CPU Superchip.

The supercomputer is known as Isambard 3, and it will be based in the U.K. at the Bristol & Bath Science Park. With roughly 2.7 petaflops of FP64 peak performance, the Nvidia-CPU-powered Isambard 3 will be “among the world’s three greenest non-accelerated supercomputers.”

In addition, Nvidia plans to build a quantum-computing lab with the Jülich Supercomputing Centre (JSC) at Forschungszentrum Jülich (FZJ) in Germany. This “will feature a classical-quantum supercomputer in partnership with” ParTec AG in Munich, based on Nvidia’s quantum-computing platform.

It will be interesting to see what Nvidia and its collaborators in Germany come up with. Suffice it to say, Nvidia is relentlessly pursuing the leading edge of GPU-powered supercomputing. The company is doing this not only in the U.S. but in Europe as well.

Stay in the Trade With NVDA Stock

Nvidia’s long-term investors might be tempted to take profits now. After all, they’ve doubled their money year-to-date. Yet, I’d like to encourage you to stay in the trade. You might even consider adding to your position in NVDA stock.

Nvidia is creating a wide competitive moat by pursuing cutting-edge technology in multiple tech niches. So, now’s not the time to lose faith in Nvidia. Rest assured, the company will continue to offer outstanding value to its shareholders.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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