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Why NVIDIA Stock Jumped Nearly 15% in August

Why NVIDIA Stock Jumped Nearly 15% in August

What happened

Shares of NVIDIA (NASDAQ: NVDA)  rose 14.6% in August, according to data from S&P Global Market Intelligence. This brings the graphics processing unit (GPU) specialist's year-to-date 2018 return to 45.5% through Friday, Aug. 31.
For context, the S&P 500  returned 3.3% in August and has returned 20.4% so far in 2018.
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Image source: Getty Images.
We can attribute NVIDIA stock's strong August performance to the company's release of robust second-quarter results  on Aug. 16, along with its unveiling of its first GPUs based on its new Turing GPU architecture.
For the quarter, NVIDIA's revenue grew 40%, earnings per share soared 91%, and EPS adjusted for one-time factors surged 92%. While bottom-line results easily surpassed Wall Street's expectation, the market's initial reaction wasn't positive: It sent shares tumbling nearly 5% on the day after earnings were released because of concerns about revenue from the cryptocurrency market drying up more than expected. But the market seemed to come to its senses after digesting the results and taking in the company's new product announcements, as shares began their steady rise on the second market day following the earnings release.
Turing is the world's first GPU that enables real-time ray tracing. Among other things, ray tracing in real time will enable developers to achieve cinematic quality in their video games. A few days prior to the earnings release, the company unveiled three Turing-based workstation GPUs, and several days following the release it introduced its Turing-based GeForce RTX series gaming GPUs.

Now what

There's no need for investors to change investing course. Existing investors should enjoy the ride; it's not over.
Find out why Nvidia is one of the 10 best stocks to buy now
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Beth McKenna owns shares of Nvidia. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool has adisclosure policy .
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