30. April 2021 | 08:40 CET
Nvidia, NSJ Gold, Coinbase - How to counter inflationary pressures?
Historically, tangible assets have performed poorly compared to equity investments. According to a Bank of America study, that may now be starting to change. The constant printing of money is fueling inflation. Tangible assets such as real estate, precious metals or collectibles are suitable as a hedge against inflation. While the first two categories are self-explanatory, there are new categories, especially in collectibles. The familiar areas are wine and art objects. Recent additions are cryptocurrencies, first and foremost Bitcoin, of course. In the course of this hype, high-performance graphics cards have also become rare. These are now traded at more than double the recommended retail price. So today, we take a look at Nvidia, NSJ Gold and Coinbase.
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ISIN: US67066G1040 , CA62973P1071 , US19260Q1076
Nvidia - Full steam ahead
Nvidia is the market leader in the graphics processing unit (GPU) sector. In the meantime, however, it is no longer only active in graphics cards but also uses the computing capacity of GPUs in the field of artificial intelligence (AI), such as in deep learning. Companies such as Baidu, Microsoft and Facebook are taking advantage of this.
Looking at Nvidia's annual report, 95% of its revenue comes from the GPU market. 51% comes from gaming, 27% from high-performance data centers like AI, and 11% from professional visualization. The Company also wants to position itself in the CPU market, which was previously reserved for Intel and AMD. If successful, another revenue stream is created.
The share knows only one direction since the Corona Crisis and that is north. On the one hand, the demand increased due to Corona, and on the other hand, the graphics cards are used for mining cryptocurrencies. As long as bitcoin has such a high value, graphics cards will remain scarce on the market and Nvidia will continue its success story.
NSJ Gold - Young explorer with potential
NSJ Gold is only very freshly listed on the stock exchange and issued around 9.1 million shares at CAD 0.2 with the IPO. The Company has secured the rights to the Golden Hills project in Arizona and intends to mine gold and copper there. The property is 8.5 square kilometers and is surrounded by copper and gold mines. Historic drilling in 2010 has already found gold and copper just a few meters below the surface. The Golden Hills project has 7 patented and 94 unpatented claims.
On April 15, the Company released the first update on its exploration drilling. Already 5 holes have been drilled around the identified gold and copper discoveries. The rock is similar to what was drilled when the deposits were first found. The first round of drilling is expected to be completed by the end of April. Samples will then be taken for analysis. A positive factor that investors should not underestimate is the Company's management board. It is staffed with experienced people from the mining sector, and with Richard Kern, they have the man on board who knows the Golden Hills area like the back of his hand.
At the beginning of NSJ Gold's IPO, the stock reached its all-time high at CAD 0.37 and then fell back to the issue price of CAD 0.2. The share is currently trading at around CAD 0.23 and so one can be in at almost the cost price. If the analysis of the samples confirms the initial findings, nothing should stand in the way of a rising share price.
Coinbase - Between many imponderables
The stock market launch for Coinbase was more than successful. The issue price was USD 250 and it already went up to over USD 429 on the first trading day. Since then, there has been profit-taking; even the CEO sold around 750,000 shares.
A lot has happened since then, the bitcoin price dropped sharply and now there are growing calls for crypto exchanges to collect more information about customers. According to Reuters, a US group of experts is calling for much stronger regulation of cryptocurrencies. It is hoped that this will curb extortion from the Internet.
Revenue and profit for Coinbase result, among other things, from the high bitcoin price. If this falls, then sales and profits decline. Many users of Bitcoins like the anonymity, and with stronger regulation, this will undoubtedly impact trading volumes. So the investment in Coinbase is closely linked to the bitcoin price. Bitcoin's last setback saw it drop 80% before moving to new all-time highs. Bitcoin will remain volatile.