NEW YORK (TheStreet) -- Shares of NVIDIA (NVDA) - Get Report were gaining 2.7% to $24.36, hitting a 52-week high of $24.58, on Wednesday after the announcement that Microsoft (MSFT) - Get Report will offer NVIDIA GPU-enabled applications and accelerated computing graphics to Azure customers.
Microsoft will deploy the newest version of NVIDIA GRID in its new N-Series virtual machine offering to provide NVIDIA GRID 2.0 virtualization graphics to enterprise customers.
The offering will be the first time businesses will be able to use NVIDIA Quadro-grade graphics through the cloud. Azure will also give businesses access to the NVIDIA Tesla K80 GPU accelerators, which offer "supercomputing-class performance" for demanding data center and high performance computing applications.
"Our vision is to deliver accelerated graphics and high performance computing to any connected device, regardless of location," NVIDIA Co-founder and CEO Jen-Hsun Huang said in a statement. "We are excited to collaborate with Microsoft Azure to give engineers, designers, content creators, researchers and other professionals the ability to visualize complex, data-intensive designs accurately from anywhere."
About 10.3 million shares of NVIDIA were traded by 2:57 p.m. Wednesday, above the company's average trading volume of about 8.3 million shares a day.
TheStreet Ratings team rates NVIDIA CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate NVIDIA CORP (NVDA) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 5.36, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 69.29% to $163.00 million when compared to the same quarter last year. In addition, NVIDIA CORP has also vastly surpassed the industry average cash flow growth rate of -22.77%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for NVIDIA CORP is rather high; currently it is at 60.45%. Regardless of NVDA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NVDA's net profit margin of 2.25% is significantly lower than the industry average.
- You can view the full analysis from the report here: NVDA