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HOW TO INVEST IN NVIDIA FROM BAHAMAS

NVIDIA is currently the star stock, experiencing a surge in value due to the rise of artificial intelligence and the critical demand for hardware, specifically semiconductors. Trades at the NASDAQ stock exchange in New York, the epicenter of technology stock trading in North America.

So, is it a good investment? Are there any potential pitfalls? What should I take into account when investing from Bahamas? This article will answer these questions and more.

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6. heinäk. 2024

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Step-by-Step Guide to Investing in NVIDIA

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Driver's License
NVIDIA Corporation

SELECT A STOCKBROKER

Choosing the right broker from the start is essential because changing brokers later is a hassle. It impacts your overall returns through fees, and provides necessary trading tools and resources. Starting with the right broker sets a solid foundation for successful investing.

OPEN A TRADING ACCOUNT

The Broker will ask you to verify your email address and upload personal docs via their app (Driver's License or Passport and Proof of address, for example, Bahamas Power & Light Bill.

SELECT THE ACCOUNT BASE CURRENCY

This step is important because it might be a hustle to change it afterwards, and you will avoid foreign exchange fees. Remember that NVIDIA trades in USD.

FUND THE ACCOUNT

Your account can be funded via cards, transfers or wallets. Deposits provide the required liquidity to buy NVIDIA Stock. If possible, use Bahamian payment systems to deposit, it will make future withdrawals much more convenient.

Do you need an international wallet? Try this one

BUY NVIDIA STOCK

Select 'NVDA' (Stock's Trading Symbol) at the Broker's Trading application, and then open an order to buy it at, either the market price, or the limit price that you select.

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Stock Analysis: NVIDIA and the Technology Sector


NVIDIA focuses on designing and manufacturing graphics processing units (GPUs). It has also diversified its operations into other areas, becoming a leader in graphics, data centres, and artificial intelligence (AI), positioning itself at the centre of what many analysts call the "New Industrial Revolution" of information.


NVIDIA's Key Business Segments


NVIDIA's operations span several high-growth segments within the semiconductor and broader technology industries:


  • Graphics Processing Units (GPU): NVIDIA is best known for its GPUs used in gaming, professional visualization, and increasingly in AI and machine learning applications.

  • Data Centers: NVIDIA's data centre products, including its high-performance GPUs and AI computing solutions, are critical for data-intensive applications and cloud computing.

  • Artificial Intelligence (AI): NVIDIA provides hardware and software that drive AI research, autonomous vehicles, robotics, and more.

  • Automotive: NVIDIA's DRIVE platform offers solutions for autonomous driving, contributing to advancements in self-driving cars and intelligent vehicle systems (Tesla, for example, uses NVIDIA architecture).

  • Edge Computing: With the growth of IoT (Internet of Things) and the need for real-time data processing, NVIDIA's edge computing solutions are becoming increasingly relevant and, therefore, in demand by the public.


NVIDIA's Client List


Another perspective to analyze a stock as an investment is to consider who the company's clients are. This approach offers an idea of the 'league the company plays in' and provides information about potential increases or decreases in the stock's value.

When one of its major clients increases in value, the company's stock is likely to rise, and vice versa.


NVIDIA's major clients span a wide range of industries. Here is a brief list of the most notable clients:


  • Amazon Web Services (AWS): Uses NVIDIA GPUs for cloud computing and AI services.

  • Google Cloud: Implements NVIDIA GPUs to enhance both its AI and machine learning services.

  • Microsoft Azure: Integrates NVIDIA GPUs for cloud computing and AI services.

  • Apple: Uses NVIDIA technology in some of its products and for software development.

  • Dell: Integrates NVIDIA GPUs in its laptops and workstations.

  • HP: Uses NVIDIA GPUs on its personal computers and professional workstations.

  • Tesla: As previously mentioned, Tesla implements NVIDIA's AI solutions for its autonomous driving systems.

  • Toyota: Also uses NVIDIA's DRIVE platform to develop autonomous vehicle technology.

  • Activision Blizzard: Collaborates with NVIDIA to optimize games and graphics technologies.

  • Electronic Arts (EA): Uses NVIDIA GPUs to enhance the graphical performance of its video games.

  • JP Morgan: Utilizes NVIDIA technology to improve its data analysis and financial processing capabilities.


Challenges and Risks


However, it is not so rosy. Despite its strong market position, NVIDIA faces several challenges and risks.


  • Supply Chain Issues: The semiconductor industry has been affected by supply chain disruptions, impacting the availability of components.

  • Regulatory Risks: Geopolitical tensions and trade policies can affect NVIDIA's global operations and market access. Most of NVIDIA's high-performance chips are produced by TSMC (Taiwan Semiconductor Manufacturing Company) in Taiwan. Tensions between Taiwan and China pose a disruption risk if the Asian giant decides to block or intervene in the island.

  • Intense Competition: The competitive landscape requires constant innovation and investment in R&D to maintain market leadership.

  • Market Cyclicality: The semiconductor industry is subject to cyclical demand fluctuations, which can impact NVIDIA's financial performance.


So, Is NVIDIA a Good Investment?


Based on the information presented earlier, NVIDIA has consolidated itself as a segment leader and has experienced significant growth due to high demand for its solutions and products.


NVIDIA is at the forefront of innovation and has shown more than solid financial results: It is not a startup that has been losing money for decades but has continuous growth prospects. The company has strategic alliances with tech giants. All this leads to the answer to the question of this section being yes.


The skyrocketing price behaviour of NVIDIA's stock during 2023 and 2024 was the main reason the company decided to do a stock split, allowing retail investors to purchase the stock. This year's stock split was... 10-for-1! Read More on NVIDIA's stock split.


However, there are potential risks. The semiconductor industry is cyclical and can be volatile, affecting the stability of its revenues. NVIDIA also faces intense competition from companies like AMD and Intel, which require constant innovation. Conducting thorough research and staying informed is key. Let's analyze these matters further.

3 Aspects to Take into Account When Investing in NVIDIA from Bahamas

Currency exchange rates can significantly impact your investment returns. Unfavorable movements can reduce gains when converting profits back to BSD, while favorable movements can increase them.

When investing in U.S. stocks, be aware of the brokerage fees charged for buying and selling shares. These fees can vary significantly between brokers and can impact your overall returns.

Keeping track of your U.S. stock investments is crucial for making informed decisions. Use financial news platforms, brokerage tools, and stock tracking apps to stay updated on performance, market trends, and any relevant news that might impact your investments.

Overview of the Semiconductor Industry


When investing in a particular stock and considering its value to rise, you should also consider the industry trends in which it operates. In other words, if you are going to invest in a stock that has value today, but the industry's trend is downward, you should analyze how this will affect your portfolio if you are a medium or long-term investor.


The semiconductor industry is crucial to the global economy, providing essential components for various electronic devices. Semiconductors are the backbone of modern electronics, from consumer devices to complex industrial systems. The key segments within this industry include microprocessors, memory chips, and integrated circuits.



Industry Trends and Growth Factors


Several trends and growth factors are shaping the industry in which the company operates:


  • Expansion of AI and Machine Learning: First and foremost, AI and machine learning are transforming various industries. GPUs (such as those from NVIDIA) are essential for training and deploying AI models.

  • Increase in the Number of Devices We Use: We are using more and more smart devices, so the demand for GPUs continues to grow, driven by gaming, professional visualization, and applications of these devices.

  • Growth of Data Centers: Expanding cloud computing and data-driven applications has increased demand for high-performance computing solutions.

  • Autonomous Vehicles: The automotive industry is experiencing a significant shift towards autonomous and intelligent vehicles.

  • Edge Computing and IoT: The proliferation of IoT devices and the need for real-time data processing drive the growth of Edge Computing.

  • 5G Technology: Deploying 5G networks is expected to accelerate advancements in AI, IoT, and edge computing, providing new opportunities for NVIDIA.

Alternative Assets to NVIDIA


While NVIDIA is a leader in the technology industry and, as mentioned earlier, one of the top stocks, there are other alternatives to invest in the semiconductor industry.


There are two main alternatives by type of asset: Stocks or ETFs. ETFs, or exchange-traded funds, are investment funds traded on stock exchanges, similar to individual stocks. They generally track the performance of a specific index, sector, commodity, or asset class, providing diversified exposure to investors.


Let's start with alternative stocks to consider.


Alternative Stocks to NVIDIA


  • Advanced Micro Devices (AMD): AMD is a key competitor of Nvidia, known for its high-performance CPUs and GPUs. The company has gained significant market share in both consumer and enterprise markets. AMD produces GPUs for gaming, professional GPUs, CPUs, data centres, and semi-custom products.

  • Intel Corporation (INTC): Intel is one of the largest semiconductor companies in the world, and it is traditionally known for its CPUs. Recently, Intel has advanced into the GPU market with its Intel Xe line. In addition to CPUs and GPUs, Intel offers data centre solutions, IoT, and memory products.

  • Qualcomm Incorporated (QCOM): Qualcomm is a leader in wireless technology and semiconductor products. Although primarily known for its mobile processors (Snapdragon), it also develops AI solutions, IoT, and automotive chips.

  • Broadcom Inc. (AVGO): Broadcom designs, develops, and supplies semiconductor solutions and infrastructure software. The company has a strong presence in the networking and storage markets, offering networking chips, broadband, enterprise storage, and wireless solutions.

  • Micron Technology (MU): Micron specializes in memory and storage solutions, providing DRAM, NAND flash, and 3D XPoint memory products. Its technologies are critical for high-performance computing and data centres, including SSDs and storage solutions for mobile devices.

  • Texas Instruments Incorporated (TXN): Texas Instruments is an important player in the design and manufacture of semiconductors, with a diverse portfolio that includes analogue chips, embedded processors, and sensors for various industries, including automotive and industrial applications.

  • ASML Holding (ASML): ASML is a key supplier for semiconductor manufacturing. It is known for its photolithography machines, crucial for producing advanced chips. Hence, very much at the peak of the AI revolution, we are going through. Additionally, it offers semiconductor equipment and related services.

  • Taiwan Semiconductor Manufacturing Company (TSMC): TSMC is the world's largest contract semiconductor manufacturer. They produce chips for various applications and have a significant customer base, including NVIDIA, AMD, and Apple. Its key areas include semiconductor manufacturing, foundry services, and advanced process technologies.

  • Lam Research Corporation (LRCX): Lam Research provides wafer fabrication equipment and services for the semiconductor industry, supporting companies in chip production. Its technologies include semiconductor processing equipment, etching, and deposition.


Semiconductor-focused ETFs


In addition to individual stocks, investors can consider semiconductor ETFs that offer exposure to a complete portfolio of stocks from companies within the industry. Here are some of the main ones:


  • VanEck Vectors Semiconductor ETF (SMH): SMH tracks the performance of the MVIS US Listed Semiconductor 25 Index.

  • iShares PHLX SOX Semiconductor Sector Index ETF (SOXX): SOXX tracks the performance of the PHLX Semiconductor Sector Index.

  • SPDR S&P Semiconductor ETF (XSD): XSD tracks the performance of the S&P Semiconductor Select Industry Index.

  • First Trust NASDAQ Semiconductor ETF (FTXL): FTXL tracks the Nasdaq US Smart Semiconductor Index.


These ETFs provide a convenient way to gain diversified exposure to the semiconductor industry. As mentioned, each index fund replicates the stocks of different indexes, meaning the stock portfolio also has differences. Nonetheless, these ETFs allow for a reduction in investment risk associated with individual stocks.


While there are other investment alternatives, we only mention those most directly related to the asset we are analyzing.

Keep track of the markets and what they mean for you.

Tips for Finding a Good Broker for Stock Investing


Choosing the right broker is crucial as it allows you to invest in financial markets.


A good broker facilitates transactions and provides the necessary tools, resources, and support to make informed investment decisions. Before this section, we present a broker's ranking that discusses the type of broker you require to invest in this asset.


Here are some tips to help you find the broker that best suits your needs:


  1. Regulation and Security: Ensure the broker is registered with major financial regulatory bodies. Additionally, verify if they are members of investor protection schemes that safeguard your funds.

  2. Commissions and Fees: Compare the commissions for buying and selling stocks, i.e., the costs. Some brokers offer "commission-free trading," which can benefit frequent traders; however, these entities make money by charging you other fees. Consider additional fees such as account maintenance, inactivity, and withdrawal fees.

  3. Trading Platform and Tools: Evaluate the usability, speed, and reliability of the trading platform where you will invest. A good platform should be intuitive and offer real-time data, charting tools, and technical analysis indicators.

  4. Range of Investment Options: Ensure the broker provides access to a wide range of stocks in various global markets. This is particularly important if you plan to diversify your investments internationally. Check if they offer other investment products, such as ETFs, mutual funds, bonds, and options, which can provide additional diversification opportunities.

  5. Customer Service and Support: Test the broker's customer service by contacting them with questions before opening an account. Evaluate their responsiveness, professionalism, and availability. The last thing you want is to have a problem, and no one responds. We're talking about your capital.

  6. Account Types and Minimums: Review the types of accounts offered, such as individual brokerage accounts, retirement accounts, and margin accounts. Check if there are minimum deposit requirements and ensure they align with your financial capabilities.

  7. Speed and Quality of Execution: Investigate the broker's order execution speed and quality, i.e., how long it takes the broker to process your buy and sell orders. Fast and accurate execution is crucial, especially for active traders.

NVIDIA is currently the star stock, experiencing a surge in value due to the rise of artificial intelligence and the critical demand for hardware, specifically semiconductors.

NVIDIA has become one of the leading stocks on the NASDAQ stock exchange in New York, the epicenter of technology stock trading in North America.

About the NASDAQ Stock Exchange


As we have repeatedly mentioned, the stock trades on the NASDAQ stock market in New York, one of the world's largest and most well-known stock exchanges.


Established in 1971, NASDAQ is renowned for its high-tech infrastructure and is home to many of the world's leading technology companies, such as Apple, Microsoft, Amazon, and Google.


With a high volume of trades, NASDAQ offers significant liquidity, making it easier for investors to buy and sell shares without causing major price fluctuations.


NASDAQ is synonymous with technology and innovation, hosting many of the world's leading tech companies and offering a platform for emerging growth companies.


Trading on NASDAQ


Stocks listed on NASDAQ are traded electronically through a network of computers rather than on a physical trading floor. This electronic system offers several advantages, including faster transaction times and greater transparency. Here's how stock trading works on NASDAQ:


  1. Listing and Market Makers: Companies must meet stringent requirements to list their stocks on NASDAQ. Once listed, market makers—financial firms responsible for providing liquidity—facilitate trading by posting bids and asking stock prices.

  2. Order Placement: Investors place buy or sell orders through their brokers. These orders are then sent to the NASDAQ network, which matches them with corresponding buy or sell orders.

  3. Trade Execution: The trade is executed electronically when a match is found. The NASDAQ system ensures that trades are processed quickly, often in milliseconds, ensuring efficient price discovery and execution.

  4. Regulation and Oversight: NASDAQ operates under the regulation of the US Securities and Exchange Commission (SEC) and adheres to strict rules to ensure fair trading practices and market integrity.

  5. Trading Hours: NASDAQ operates during regular trading hours from 9:30 AM to 4:00 PM Eastern US Time, with pre-market and after-market trading sessions available for extended trading opportunities.

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Specific Strategies for Investing in Stocks


We have already analyzed the stock, the fact that you need a broker as an intermediary, and the stock exchange where this stock is listed. The next question you should ask yourself is: How do I invest? What types of investment strategies exist?


The answer to this last question is: It depends. Consider your investment goals, time horizon (do you want to buy and sell within a day versus investing long-term), and the capital you have available.


Below, we briefly present some of the most common investment strategies, from Long Term to Short Term.


Buy and Hold Strategy


  • Horizon: Long Term

  • General Description: This strategy involves buying and holding stocks for an extended period, regardless of market volatility.

  • Objective: Benefit from the overall growth of the stock market and the compounding effect of reinvested dividends.

  • Tips: Select companies with solid fundamentals and a consistent performance history. Diversify across multiple sectors to spread risk. Be patient and avoid reacting to short-term market fluctuations.


Dividend Investing


  • Horizon: Long Term

  • General Description: Focus on stocks that pay regular dividends, providing a steady income stream and potential capital gains.

  • Objective: Generate passive income and benefit from the compounding effect of reinvested dividends.

  • Tips: Look for companies with a strong history of dividend payments and increases. Evaluate the dividend yield, payout ratio, and sustainability of the dividends. Consider using a Dividend Reinvestment Plan (DRIP) to reinvest dividends automatically.

Check out our ranking of the best apps for Dividend Investing.


Growth Investing


  • Horizon: Long Term

  • General Description: Invest in companies expected to grow at an above-average rate compared to other companies.

  • Objective: Achieve significant capital gains through stock price appreciation.

  • Tips: Focus on companies with strong earnings growth, innovative products, and a competitive advantage. Be prepared for higher volatility and the possibility of larger price swings. Conduct thorough research to identify emerging industries and market trends.


Index Investing


  • Horizon: Long Term

  • General Description: Invest in index funds or ETFs that track major stock market indices, such as the S&P 500, NASDAQ, or Dow Jones.

  • Objective: Achieve broad market exposure and benefit from the overall market growth with lower fees and risk.

  • Tips: Choose low-cost index funds or ETFs that offer diversification across multiple sectors. Use dollar-cost averaging to invest a fixed amount regularly, reducing the impact of market volatility. Rebalance your portfolio periodically to maintain the desired asset allocation.

Check out our ranking of the best apps for Index Trading.


Value Investing


  • Horizon: Medium Term

  • General Description: Based on fundamental analysis, identify undervalued stocks that are trading below their intrinsic value.

  • Objective: Benefit from the market's eventual recognition of the stock's true value.

  • Tips: Use metrics such as the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and discounted cash flow (DCF) analysis to assess value. Look for solid finances, good management, and a competitive advantage. Be patient, as it may take time for the market to recognize the stock's true value.


Momentum Investing


  • Horizon: Medium/Short Term

  • General Description: Invest in stocks that show strong upward momentum, expecting the trend to continue.

  • Objective: Capture gains from stocks that are trending upwards.

  • Tips: Identify stocks with strong recent performance and high trading volumes. Use momentum indicators like moving averages and RSI to confirm trends. Be prepared to exit positions quickly if momentum reverses, using stop-loss orders to limit potential losses.


Contrarian Investing


  • Horizon: Medium/Short Term

  • General Description: Take positions against the prevailing market sentiment, buying when others are selling and vice versa.

  • Objective: Benefit from market overreactions and mispricing.

  • Tips: Look for fundamentally strong stocks that have been oversold due to negative news or market sentiment. Be patient and willing to hold positions until market sentiment reverses. Conduct a thorough fundamental analysis to ensure the stock's underlying value supports your investment thesis.


Swing Trading


  • Horizon: Short Term

  • General Description: A short-term strategy involves holding stocks for a few days to weeks and capitalizing on expected price movements.

  • Objective: Gain from short to medium-term price fluctuations using technical analysis.

  • Tips: Use technical indicators like moving averages, Relative Strength Index (RSI), and MACD to identify entry and exit points. Set stop-loss orders to manage risk and protect against significant losses. Stay updated on market news and events that may impact stock prices.


Day Trading


  • Horizon: Short Term

  • General Description: This strategy involves closing trades within the same day based on technical analysis and intraday market movements.

  • Objective: Profit from daily price movements.

  • Tips: You need a solid understanding of technical analysis and access to real-time trading tools. Use strategies such as scalping and breakout trading. Set stop-loss orders to manage risk and limit losses. Stay updated on news and events that may affect stock prices during the day.

Check out our ranking of the best apps for Day Trading.


News Trading


  • Horizon: Short Term

  • General Description: Strategy that involves taking positions based on the market's reaction to significant news and economic events.

  • Objective: Capitalize on volatility and rapid price movements from news and significant events.

  • Tips: Stay informed about relevant news and economic events. Use an economic calendar to anticipate key events. Set stop-loss orders to protect against adverse market movements. Be quick and decisive in executing your trades.

Key Findings

  • Investing in stocks requires a deep understanding of both NVIDIA's products and market segments and the industry in which it operates.


  • Evaluating available alternatives, such as other stocks within the same sector and different types of alternative assets, is essential for building a solid and diversified portfolio.


  • Choosing a good broker and adopting investment strategies that align with your objectives and time horizon are fundamental steps to maximize your returns and manage risk.


  • Choose the right strategy: A long-term strategy like buy and hold differs from a short-term strategy like day trading.


  • Finally, staying updated with market trends and being willing to adjust your strategy as needed will help you navigate the dynamic world of investing.

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