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Is NVDA Stock a Buy After Latest e3 Announcements?

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E3 2019 is in full swing, with the who’s who of the gaming world converging in Los Angeles. So far, some of the notable announcements include Microsoft’s (NASDAQ:MSFT) new Xbox platform, called Project Scarlett, that will hit the markets during the holiday season of 2020. There will also be a new Halo game called “Halo Infinite.” Even fantasy writer George R.R. Martin — who is the mastermind behind the “Game of Thrones” — is providing his creativity in assisting with the development of a game called “Elden Ring.” Oh, and of course, Keanu Reeves made a stir as he announced his role in the eagerly-awaited “Cyberpunk 2077.” All this is certainly great. But there are also some important developments from the technology suppliers in the gaming world.

Is NVDA Stock a Buy After Latest e3 Announcements?

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Look at Nvidia (NASDAQ:NVDA). While it has built a strong businesses in cloud computing and AI (Artificial Intelligence), the majority of the revenues still come from the gaming industry.

The good news for the Nvidia stock price is that the company continues to push the boundaries of innovation — making the gaming experience more realistic and immersive.

So what are the latest developments? Well, the company has made some inroads with Samsung. To this end, NVDA’s G-Sync system will be a part of the Samsung CRG5 gaming monitor. Until now, the only option was to use Advance Micro Devices’ (NASDAQ:AMD) FreeSynch, which could actually be tough to get.

The G-Sync platform links up with a 240Hz refresh, which means getting standout performance and visuals (this is if you have a GeForce GPU or the RTX 20-series) — without the awful screen tearing. The CRG5 also has a curved, 27-inch VA panel (at 1,920 x 1,080) that includes wide viewing angles.

So when will the monitor be available? It will be sometime next month and the price tag will be $400. Although, this does seem on the pricey side, especially compared to alternatives from Acer.

NVDA and the RTX Chip

One of the drags on NVDA has been its RTX gaming chip. True, it is highly innovative as it allows for real-time ray tracing, programmable shading and AI. Yet it has taken time for the market to adopt the technology, which has weighed on growth.

But this should be worked out over time. In fact, at the E3 conference, NVDA announced that Ubisoft will use the RTX system for its 2020 release of “Watch Dogs: Legion”. According to the vice president of Partnerships & Revenue at Ubisoft, Chris Early: “Watch Dogs: Legion’s near-future London comes alive with a vibrance and realism that can only be achieved with ray tracing. GeForce RTX is leading gaming into the future and is the perfect platform to focus on for Watch Dogs: Legion.”

Bottom Line on Nvidia Stock

Even with all the innovation, I still think investors should remain cautious on NVDA stock. The data center remains … cloudy. There appears to be an oversupply of chips on the market, as seen with the subpar earnings results from Intel (NASDAQ:INTC), Cloudera (NYSE:CLDR) and Pivotal Software (NYSE:PVTL). And this situation could last a while.

But the U.S.-China trade war is perhaps the biggest issue for the Nvidia stock price. The resolution is far from clear. What’s more, the company gets a hefty 23% of revenues from China and there will likely be disruptions in the global supply chain.

In other words, for now, it’s probably best to avoid Nvidia stock.

Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction.  Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

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