by How To Buy NVIDIA Stock – Financial Treat. Although the company’s name is somewhat unknown, you’ve probably used NVIDIA’s products in a game console or PC before. Today, NVIDIA dominates the GPU market, and its products could become the backbone of artificial intelligence (AI) computing applications such as self-driving cars in the future.
This exciting potential has driven NVIDIA’s strong performance: Q3 2021 revenue rose 50% year over year, and its stock price rose nearly 127% year over year. Forward-looking investors should add this cutting-edge large-cap stock to their portfolio. How to buy NVIDIA stock in five easy steps.
The first step in buying stocks is to open a brokerage account (if you don’t already have one). (If yes, you can skip to step 2.)
You want a brokerage account with no transaction fees and low account minimums. To get a head-start on which is best for you, check out Forbes Advisor’s list of the best brokers and investing apps.
When choosing a brokerage firm, you should also consider your investment objectives. Do you want to save for retirement? In this case, choose an individual retirement account (IRA), which is similar to an individual 401(k). It gives you tax relief. If you need to withdraw money from your account until you are at least 59 ½ years old, in most cases you may be subject to taxes and penalties.
If you’re investing for short-term goals, you should probably opt for a taxable brokerage account. While you don’t get the tax benefits of an IRA, you can put as much money into your account as you want and withdraw your profits when you need them. You can also take advantage of tax losses.
Chances are, you’re not going all-in on NVDA. But you may not be sure what the correct amount to invest is. You can figure out how much NVIDIA you should be buying by asking yourself the following questions.
Despite its impressive past performance, you don’t want to blindly buy into NVDA’s fundamentals and current financial health.
To determine NVIDIA’s financial position, start with the information on the company’s investor relations website. The U.S. Securities and Exchange Commission (SEC) requires public companies to file annual reports on Form 10-K and quarterly reports on Form 10-Q. You can find this information on the Investor Relations website and on the SEC’s databases.
Novices also find it helpful to turn to resources like Morningstar or your broker’s research offerings for expert analysis of NVIDIA’s quarterly and annual reports. These can help you better understand how your company’s financials are performing over time.
To buy NVIDIA, log into your brokerage account or investing app and fill out an order. You must enter the company’s ticker symbol, NVDA, and the desired number of shares or dollar value.
You can optionally specify an order type. The most common are market and limit orders.
With a market order, you request to buy a stock at its current best price. This usually means you can expect an immediate sale, but no specific price is guaranteed. If you can’t choose how to make a purchase, it may be a default market order.
Meanwhile, if you want to be sure that you are only buying NVDA at a certain price, you can choose a so-called limit order. This allows you to set a fixed amount for the amount you wish to spend, and if the stock price is above that amount, your order will not be filled.
Since NVIDIA trades on the Nasdaq exchange, you can buy it from 9:30 am to 4:00 pm. Eastern Time, Monday through Friday. You can also do pre-market and post-market trades through brokerage firms.
Investing is not a one-time task. Even after you’ve purchased your NVIDIA stock, it’s important to regularly review your stock’s performance so you can determine whether it’s still meeting the goals you’ve set.
Start by looking at how much NVIDIA stock has risen over the past year and compare it to other assets in your portfolio, other tech stocks (stocks you own or perform well), and benchmarks like the Nasdaq Composite or S&P Compare 500 You may also want to review the financial information you were looking at when deciding to buy NVDA and see how it has changed over time.
You may not keep your NVDA forever. Even long-term investors eventually sell their holdings.
To sell your NVIDIA stock, all you need to do is log into your investment account, enter the ticker symbol and the quantity you want to sell, and place a market or limit order.
Hopefully you’ll make a profit, which means you may owe taxes. If you’ve sold and made huge profits from taxable investment accounts, you may want to talk to a tax professional about how best to manage them.
Buying individual shares of NVIDIA is just one way to capitalize on its growth. You can also take a safer, more diversified approach by buying exposure through index funds and exchange-traded funds (ETFs). These allow you to buy hundreds or thousands of companies at once, reducing the overall risk of losing your investment. You can buy index funds and ETFs just like individual stocks.
NVIDIA is easy to find in many index funds and ETFs, as it is part of the S&P 500 and Nasdaq 100, two major index funds that are frequently copied. NVIDIA accounts for 1.5% of most S&P 500 index funds and 3.6% of most Nasdaq 100 index funds.
