Nvidia Is One of the S&P 500’s Biggest Gainers in 2021. It Should Replace Netflix in the FAANGs.

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Nvidia stock has soared in 2021—and it’s going out with a bang. According to one firm, it’s time to consider whether it’s time for it to replace Netflix in the FAANGs.

Shares of Nvidia have gained 138% in 2021, good for third-best in the S&P 500, and the semiconductor company’s stock shows no sign of letting up. It’s up another 1.4% to $313.66 Tuesday morning, set for a fifth day of gains, though still a touch below its all-time high of $333.72.

Some of this is overall strength in chip stocks. Advanced Micro Devices (AMD) has gained 1.2% on Tuesday morning, while the iShares Semiconductor ETF (SOXX) has risen 0.8%. The sector continues to benefit from strong demand for their products, while supply continues to be tight.

But Nvidia has its own, company-specific reasons for being so strong. It’s got a hand in just about every area of strength, from videogames and bitcoin to artificial intelligence and the metaverse, and seems poised to keep growing from strength to strength. In fact, the folks at Fundstrat argue that Nvidia really should replace Netflix (NFLX) as the N in FAANGs.

“We believe the day will someday come potentially when Nvidia is considered to have far more in common with the likes of Google , Apple , and Amazon [than] Netflix does,” they write. “The latter is embroiled in the costly trench-warfare-style competition of the digital content wars, where Nvidia seems to be essentially gliding over all. Long gone are the days when this cutting-edge Silicon Valley knight traded in close correlation to cryptocurrency.” 

Perhaps it’s already here.

Write to Ben Levisohn at ben.levisohn@barrons.com