Investors who want to buy Nvidia stock should follow a few steps before hitting the button. Here is how to buy Nvidia shares (NVDA) either as a short-term active trader or long-term investor
What is Nvidia
Founded in 1993, NVIDIA is a top-industry designer and manufacturer of computer graphics processors, chipsets, and related multimedia software, taking on the mission of accelerating the world’s development regarding digital experiences and solving global visual computing challenges.
The company set the general direction towards accelerated and graphics-based computing, believing it could solve problems that the general retail-oriented computing manufacturers could not address.
Besides the graphics-based computer chips built by the company, the founders also noticed that video games were becoming increasingly popular, turning into a challenge for computer manufacturers and generating a high sales volume.
The company decided to switch to video games to reach large markets and raise enough funds for the R&D department that would go on to solve massive global computing problems.
While headquartered in Santa Clara, California, NVIDIA has been relying on Taiwan Semiconductor Manufacturing Company (TSM) to manufacture the graphics chips it designs. Nowadays, most of NVIDIA’s graphics processors – from the GeForce GTX 1060 for mainstream gamers to groundbreaking Nvidia P100 datacenter accelerators – are purely manufactured by TSMC.
As of 2021, NVIDIA sells the latest gaming GeForce 20 series, GeForce 30 series, splitting the benefits based on Tensor 3rd gen cores, 2nd gen RT cores. The company also sells various high-power cores Quadro RTX series for graphics stations and many other graphics-related products for different tier levels.
Nvidia is a publicly traded company, making its stock available to anyone of legal age interested in purchasing shares.
What are Nvidia shares (NVDA)
Nvidia shares represent a unit of ownership in Nvidia Corporation – and they are among the world’s most popular financial instruments. Nvidia shares will rise and fall in value according to how well the company is performing at a given moment in time. Better-than-expected earnings will make Nvidia share prices rise, while weaker earnings will make share prices fall. However, there are many reasons why a company's share price can change.
People trade Nvidia shares because, just like other financial instruments, they can be an opportunity to invest money. At a basic level, you can take a position on Nvidia shares to get exposure to economic growth. If an economy is in good shape, you might find that companies operating in that specific economic branch or industry will grow too.
Company growth is correlated with share price increases, which is what people are hoping for when they buy Nvidia shares.
The company went public in January 1999, with its shares priced at $19.69 each. An investment of $1,969 would have bought 100 shares, but after four stock splits are equivalent to 1,200 NVDA shares, and the initial capital with reinvested dividends would now have grown to $291,652 as of November 1, 2018.
The cumulative return of the stock since the IPO is 21,300%. Over the last 10 years, the stock price has increased by 1,290%. (source: Investopedia).
Nvidia stock is traded on the Nasdaq stock exchange under the NVDA ticker.
If all that makes you want in on Nvidia’s semiconductor growth, here is everything you need to know to buy Nvidia stock & shares to invest in NVDA.
How to Buy Nvidia Shares
Learning how to buy shares may not sound complicated, but you will need to do some research — and learn the basics — before making your first investment.
- Learn the difference between investing and trading
- Review Nvidia’s performance and outlook 2022
- Understand the risks and charges
- Choose your trading platform and place your orders
- Stay up to date with the latest news and rumors about Nvidia
1. Learn the difference between investing and trading
People have two options to buy shares of stock online. Firstly, they can buy shares in companies on the exchanges where they are listed. For instance, you can buy Nvidia stock on the NASDAQ exchange, so you own a share in the company (investor). Alternatively, they can buy Nvidia shares without owning them, speculating on the price of the underlying asset (trader).
Investing and trading are similar terms that some people will sometimes use interchangeably – but there are significant differences for you to be aware of.
Investing in Nvidia Stock
Investors buy Nvidia shares hoping their price will rise and they can sell them later for a profit, adhering to the basic principle of buying low and selling high. Investors will take positions over a longer period, attempting to profit from share price changes as well as dividend payments.
While this means that they might need more initial capital to get started when compared to trading, their losses would be capped at this initial price tag. That said, investors should be aware they might get back less returns than they initially invested.
Investors will buy Nvidia shares to:
- Make a profit from the Nvidia share price rising
- Receive an income from dividends if the company pays them
- Benefit from the effects of compounding
This last point requires investors to hold onto their shares for an extended period. That’s why you’ll sometimes hear the phrase ‘”time in the markets is better than timing the markets” when talking about share investments.
>> Learn how to invest in stocks for beginners
Nvidia (or any single stock, for that matter) can be a very volatile investment. You can lower the risk by diversifying your investment holdings.
An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund provides a broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets.
NVDA currently makes up about 1.69% of the S&P 500, meaning 1.5% of each dollar you invest in an S&P 500 index fund goes to Nvidia. If you want an index with an even larger NVDA representation, you might consider investing in a Nasdaq index fund, where Nvidia accounts for 4.25% of holdings.
Semiconductors exchange-traded funds (ETFs) provide exposure to the performance of companies within the global automobile industry.
NVDA makes up 19.72% of USD (ProShares Ultra Semiconductors ), 10.33% of BIBL (Inspire 100 ETF), 9.70% of SMH (VanEck Vectors Semiconductor ETF ), 9.37% of QCLN (Invesco PHLX Semiconductor ETF ) and 9.3% of SOXX (iShares Semiconductor ETF).
>> Learn what ETFs are and how do they work
Trading Nvidia CFDs
On the other hand, traders might seek to capitalize on short-term share price gains. Rather than investing in the shares, traders speculate on the shares’ value. They can speculate on it rising by going long, as well as falling by going short.
Trading Nvidia stock means that you are speculating on a share’s price movements with derivatives like CFDs. In other words, you are purchasing Nvidia shares without taking direct ownership.
Leverage is available when you use this product, giving you full market exposure for an initial deposit – known as margin – to open your position.
For example, a trader who wanted to buy 100 NVIDIA CFDs at $227 per share would only require $4,540 of trading capital, thereby leaving the remaining $18,160 available for additional trades, based on our 1:5 leverage for CFDs on NVIDIA shares.
But keep in mind that leverage can increase both your profits and your losses as they will be based on the full exposure of the trade, not just the margin requirement needed to open it. This means losses, as well as profits, could far exceed your margin.
With CFDs, you can ‘buy’ (go long) the shares if you think the Nvidia stock’s price will rise, or you can ‘sell’ (go short) if you think the Nvidia stock’s price will fall.
>> Learn what is CFD trading and how it works
Going Long Nvidia CFD
NVIDIA has a sell price of $226.87 and a buy price of $227, at the time of writing.
NVIDIA’s next earnings announcement is fast approaching, and you expect it to be good news. You think the company’s share price will go up, so you buy 100 NVIDIA CFDs at $229.13. This is the equivalent of buying 100 NVIDIA shares.
Because in CFD trading you can use leverage, you do not need to put up the full value of NVIDIA shares. Instead, you only need to cover the margin, which is calculated by multiplying your exposure with the margin factor for the market you are trading.
So, if NVIDIA has a margin factor of 20%, your margin would be 20% of the total exposure of your trade (100 share CFDs x $227 = $22.700), which is $4,540.
If your prediction is correct:
When NVIDIA announces its results, it is clear the company had a successful quarter – and as you had predicted, its share price climbs. You decide to close your position when it reaches $300 with a buy price of $300.20 and a sell price of $300.00
You reverse your trade to close a position, so you sell your 100 CFDs for $300.00.
To calculate your profit, you multiply the difference between the closing price and the opening price of your position by its size.
$300.00 – $227 = $73, which you multiply by 100 CFDs to get a profit of $7,300.
If your prediction is wrong:
NVIDIA’s results are worse than expected, and its share price immediately falls. You decide to cut your losses and sell your 100 CFDs at $200.00.
Your position has moved $27 against you, meaning you lose $2.700.
Going Short Nvidia CFD
Shorting with derivatives can be an effective way to protect your investments against downward price movements in your non-leveraged investment portfolio. Also, it can be a way to generate profits outright from shares that are falling in value. But when you go short, your potential losses are theoretically uncapped because there is no limit on how high a company’s share price can rise.
Here is an example:
Suppose NVIDIA shares are currently trading with a sell price of $200, and you think the price will go down. So, you decide to open a short CFD position on 100 NVIDIA shares CFD. A week later, the buy price reaches $180.00, and you close your position. This means you made $2.000 in profit ([200.00 - 180.00] x 100 = $2.000), excluding additional costs.
If the price rises, you register a loss. For example, if NVIDIA shares rose to a price of $210, you would make a $1.000 loss instead, excluding additional costs.
When you create a trading account with CAPEX, you will be able to:
- ‘Buy’ (go long) or ‘sell’ (go short) Nvidia and other 2,000 international shares to speculate on their price rising or falling
- Take a position on our range of ETFs to get exposure to a basket of shares from an entire country, index or sector that could be rising or falling in price.
- Trade a host of global indices – including the S&P 500, the famous technology index NASDAQ 100, the Dow Jones Industrial Average (Wall Street) and the DAX (Germany 30) – to go long or short on the performance of an entire economy with a single trade.
- Use QuantX, the smart portfolio builder that helps you cover the popular industries and only invest in the top performing stocks.
2. Review Nvidia’s Performance and Outlook 2022
Before buying Nvidia stock—or any stock (see our guide on how to buy shares)—it’s wise to do some research into the company’s financials, performance, and outlook. The easiest place to get started is through a company’s annual reports and quarterly reports. Public companies like NVDA are required to publicize detailed information about their financial health in these.
You can find these on Nvidia’s investor relations site or by searching the Securities and Exchange Commission’s (SEC) database.
You may also turn to experts for their input. Brokerage companies frequently release commentary on major stocks and industries, and third-party evaluators like Trading Central provide comprehensive technical and fundamental analysis.
When you combine financial data with expert insight, you will be able to decide how much of your money you want to put into Nvidia stock.
Before you load up the trunk with Nvidia shares, pop opens the hood and see what you are really getting into. Remember, when you buy Nvidia stock, you are purchasing a small portion of an actual business:
NVIDIA Corporation operates as a visual computing company worldwide.
Nvidia's balance sheet, income statement, competition, and management (all explained in our guide on how to research stocks) will help you give the company a good once-over.
You can access research, analyst ratings, and other key information about Nvidia via your brokerage account or a financial information website. If you like what you see, your next step is to consider whether Nvidia fits into your current investment portfolio.
- Nvidia's market capitalization is $743.23 B
- Nvidia's upward move is 127.9% in 1 year
- Earnings per share (EPS) were up 107.1% over the past year
The company reported a strong third quarter with improved earning revenues and profit margins.
- NVDA's revenues are forecast to grow faster (14.94% per year) than the US Semiconductors industry average (13.51%)
- NVDA's earnings are forecast to grow faster (14.45% per year) than the US Semiconductors industry average (14.29%)
The price-to-earnings ratio (PER) is 104.47. The analysts set up a stock fair value of around $299.74, meaning Nvidia shares are undervalued 0.74% according to valuation.
*Last update: November 2021. Source: Yahoo Finance
Nvidia paid out its first dividend in 2006, and the next payout was made six years later in 2012. Since November 2012, the company has declared a dividend every quarter, adding to the value of the investment.
Nvidia dividends equal $0.28 per share. NVDA's annual dividend yield is 0.09%. Nvidia's dividend is lower than the US Semiconductors industry average of 1.68%, and it is lower than the US market average of 4.25%.
Nvidia Chart Price
Technical traders analyze price charts to attempt to predict price movement. The two primary variables for technical analysis are the time frames considered and the technical indicators that a trader chooses to utilize.
Our web-trading platform, for example, offers 6 chart types (including the famous Japanese candlestick chart) to help you analyze price performance across different timeframes. It also enables you to deal in an instant – directly from the charts. You will be able to open, close and edit positions in just a couple of clicks.
Trading charts always feature distinct patterns that technical analysts can use to interpret the behavior of buyers and sellers. These chart patterns can give traders an indication of where the market could go next. As you will notice when you look at a chart, the market will usually move in one overall direction or trend. There are three types of market trends: uptrends, downtrends, and sideways trends.
From a technical perspective, after a period of wide-ranging movement from March to September 2021, Nvidia stock has taken off strongly to the upside, driven largely by the better results published in the third quarter, until reaching new ones without finding levels of immediate resistance.
On the daily chart RSI it is at overbought levels but showing no signs of divergence or exhaustion.
To buy Nvidia shares or not?
It is recommended to watch for stocks at the major long-term support area. We should buy Nvidia shares at relatively cheap prices (compared to historical values), not expensive prices. Also, have an exit plan for how you will exit a profitable trade. Define how and why you will exit. Since we used to support to get into the trade, you may consider exiting just below a long-term resistance level.
If buying at support, and planning to exit just below resistance, the upside potential should outweigh the downside risk by at least 2:1 or even 3:1. That means that if you buy Nvidia shares at $850, you should be reasonably able to get out of the stock at $750 or higher. In an absolute worst case you lose $100 a share, but based on the historical chart it is quite feasible to go up to $200/share or more. This is known as the risk/reward ratio a key indicator when deciding to buy Nvidia shares or not.
With CAPEX WebTrader, you can perform an in-depth analysis of the charts with 90 indicators (including moving average, MACD, RSI, and Bollinger Bands). The platform also supports an interactive trading activity with high-end research tools helping you interpret market data.
3. Understand the risks and charges
Trading can be seen as riskier than investing due to leverage. But investing also carries a risk – and there is no guarantee that your investments would increase in value, so you could receive back less than you initially invested.
Before deciding to trade in shares, you should take steps to manage your risk. We have courses at CAPEX Academy that take you through risk management and how to mitigate your exposure to risk in the financial markets.
Our costs and charges for trading vary depending on the product that you use to take a position.
Nvidia (NVDA) CFD Trading Conditions
|SPREAD PER UNIT||0.38 pips||LEVERAGE||1:5|
|OVERNIGHT ROLLOVER - LONG||-0.0076 %||OVERNIGHT ROLLOVER - SHORT||-0.0063 %|
|INITIAL MARGIN||20.0000 %||MAINTENANCE MARGIN||10.0000 %|
- Spread represents the difference between ASK price and BID price.
- Future Rollover adjustment consists of the difference in price between expiring contract and new contract as well as the spread of the CFD.
- Swap is the amount credited to or debited from an account where positions are held overnight.
- Inactivity fee represents the monthly amount deducted if no activity is recorded for 12 months in an account.
4. Access the trading platform and place your orders
To buy Nvidia shares CFD with CAPEX Webtrader is very easy and intuitive. Opening an online trading account is as easy as setting up a bank account. Here are the steps:
Open an account or log in
First, create an account or log in on capex.com. To open an account click the "Register" button and complete your details.
Once the platform is accessed, the registration process must be completed in order to operate with real money. Click "Complete the Registration and Start Trading".
To log in, from the CAPEX website, click on "Login".
Deposit funds into your account
To trade with a live account it is necessary to deposit funds. This is done from the platform itself by clicking on the "Add funds" button:
Also, it is possible to trade on a risk-free demo account with a balance of € 50,000, which is ideal for getting to know the platform and testing trading strategies.
CAPEX offers you different payment methods: debit cards, credit cards, bank transfer, skrill, and more.
It is noteworthy that CAPEX does not charge any fees or commissions for depositing funds.
Look for Nvidia shares
To view Nvidia shares (NVDA) real-time price and chart on the trading platform can click on the "Search" icon located in the left panel or by clicking on "Shares" and then select the instrument, in this case, Nvidia.
Use the indicators and drawings to analyze the chart
Click the indicators icon and select your favorite ones. There are trend-following, oscillators, volatility, and support/resistance indicators available. To learn how many indicators to use and how to combine then visit the Technical Indicators section in CAPEX Academy.
Set up the order to buy Nvidia shares
To buy Nvidia shares CFD, click on the "Buy" button and a window is displayed to configure the purchase order:
The number of Nvidia shares to be purchased must be entered and it is allowed to set up a Stop Loss to limit the potential loss, and/or a Take Profit to close a profitable position once the Nvidia stock reaches a specific price. These orders can be configured based on price, pips, cash value or percentage.
To proceed with the purchase, click on "Place Order".
However, NVDA trading does not end here. You will want to check out the next step to make sure you are investing your money as well as you can.
Why Trade Nvidia with CAPEX?
- Advanced AI technology at its core: Whether they prefer the web-based and mobile-ready WebTrader or favor the highly popular MetaTrader 5, we make sure investors make effective use of fast and reliable trade execution speeds, complex order and risk management tools, advanced charting options, powerful research tools in collaboration with highly-regarded platforms such as Trading Central or TipRanks.
- Trading on margin: Providing trading on margin (up to 5:1 for individual equities), CAPEX gives you access to the stock market with the help of CFDs.
- Trading the difference: When trading Nvidia CFD, you do not buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of the Nvidia stock price. Online trading with CFDs is nothing different from traditional trading in terms of strategies. A CFD investor can go short or long, set stop loss, take profit, and apply trading scenarios aligned with their objectives.
- All-round trading analysis: The browser-based platform allows traders to shape their market analysis and forecasts with sleek technical indicators. CAPEX provides live market updates and various chart formats, available on desktop, iOS, and Android.
- Focus on safety: CAPEX puts a special emphasis on safety:
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- Global partnerships: CAPEX is proud to be the Official Sponsor of Juventus, one of the most prestigious football clubs in the world, a football club that has a special place in the hearts of the people of Italy, with a strong legacy and a dedicated community.
5. Stay up to date with the latest news and rumors about Nvidia
Get the latest Nvidia Corp. (NVDA) stock news and headlines to help you in your trading and investing decisions.
History of Nvidia
In 1998 Nvidia's reputation was solidified by developing efficient graphics adapters, boosting its sales by releasing the GeForce 256, and introducing on-board transformation to consumer-level 3D hardware.
Around 2000, the company won the contract to develop the graphics hardware for Microsoft's Xbox game console, and in 2004 announced that it would assist Sony with the graphics processor design for the PlayStation 3 console.
Forbes awarded Nvidia as Company of the Year in 2007. Still, later on, the company faced several lawsuits with big industry players after reports that mobile chipsets and GPUs had abnormal failure rates due to manufacturing errors – but settled with Intel, ending all litigation.
Fast forward to November 2011, Nvidia unveils new plans and products in relation to the handheld game console market and announces they have plans of focusing on three important markets: gaming, automotive electronics, and mobile devices. The company soon started a partnership with Toyota regarding autonomous vehicles and with Baidu on cloud computing, consumer devices, and autonomous driving. At the same time, in 2018, Google announced that Nvidia's Tesla P4 graphic cards would be integrated into the Google Cloud service artificial intelligence.
In 2020, Nvidia reported $2.79 billion, totaling to annual revenue of $10.91 billion, resulting in a decline of 6.8% over the previous fiscal cycle. The pandemic posed some challenges for the company as the chip shortage delivered a severe blow to the entire hardware manufacturing & computer industry.
According to the company, the effects of COVID will likely reflect the evolution of the company towards technologies that enable remote work and virtual collaboration. In May 2020, Nvidia's scientists also developed an open-source ventilator to address the pandemic commodity shortage. The company disclosed plans to build the most powerful computer in Cambridge, England – based on A.I. research and acting as a new one European innovation hub.
Looking to the future, Nvidia's Inception Program was started as a support plan for startups that make exceptional advances in the A.I. and data science fields. As of August 2021, the program has over 8,500 members in 90 countries, accumulating around $60 billion. Nvidia's pioneering work in accelerated computing continues to push the boundaries of the graphics and science sectors, placing the company among the top global innovators even in an economic downturn.
*Last Update: November 2021. Source: Wikipedia
Nvidia Corp. (NVDA) Latest Stock News
- NVIDIA, Inc. - Yahoo Finance
- NVDA Stock Price | NVIDIA Inc. Stock Quote (U.S.: Nasdaq) | MarketWatch
- NVIDIA News (NVDA) - Investing.com
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