Google Inc (GOOG), NVIDIA Corporation (NVDA): This Company’s Stock Is Undervalued, Despite Rumored Nexus 7 Loss

Similarly, Tegra 4i, NVIDIA’s first integrated mobile processor, will finally allow the company to gain a foothold in the mid-range smartphone market (which is larger than the tablet market). However, due to the length of the carrier certification process, it is not expected to go into volume production until 2014. The maturing of these two new businesses should lead to long-term earnings growth for NVIDIA, boosting the stock.

It’s not all waiting
While investors should stay focused on the long-term opportunity, there are some things to look forward to in 2013. NVIDIA may have lost the design slot for Google Inc (NASDAQ:GOOG)’s Nexus 7, but by February the company had already racked up more design wins for its new Tegra 4 chip than it had for Tegra 3. Furthermore, Project SHIELD, a handheld Tegra gaming device, is expected to hit the market next quarter. These products should allow NVIDIA to grow the Tegra business even before Tegra 4i hits the market in late 2013/early 2014.

NVIDIA Corporation (NASDAQ:NVDA) shareholders may be frustrated by the stock’s poor performance over the past two years, but management has done a good job of investing in growth areas that can diversify the company’s revenue base away from the PC GPU business. As these growth initiatives come to fruition over the next couple of years and reignite profit growth, NVIDIA stock could stage a strong rally.And with nearly half of the company’s value consisting of cash on the balance sheet, shareholders have significant downside protection.

The article NVIDIA Stock Is Undervalued, Despite Rumored Nexus 7 Loss originally appeared on Fool.com.

Fool contributor Adam Levine-Weinberg owns shares of NVIDIA. The Motley Fool recommends Google, Intel, NVIDIA, and VMware. The Motley Fool owns shares of Google, Intel, Microsoft, Qualcomm, and VMware.

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