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Will NVIDIA (NVDA) Rally Past the $250 Mark Anytime Soon?
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Shares of NVIDIA Corporation (NVDA - Free Report) have been up more than 100% this year. This is a very good ride when, you, as an investor, intend to cash in on the gain. However, we would suggest you to think twice, as the stock has plenty of potential to ride higher and generate more solid returns over the next few months.
Given the recent optimism surrounding the stock, we believe it is just a matter of some months that the stock will breach the $250 mark.
In fact, the company, between its Q2 and Q3 earnings results (Oct 10 to Nov 9), gained approximately 25%. Therefore, given its splendid Q3 results, the $250 mark is still a conservative view, as this only represents a 15% upside from Friday’s closing price of $216.96.
Shares of NVIDIA have gained a whopping 103.3% year to date (YTD). If you still haven’t taken advantage of this appreciation yet, this is the right time to add the stock to your portfolio. Notably, NVIDIA has substantially outperformed the industry to which it belongs to, which has gained 47.2% YTD.
Bullish Analysts’ View to Aid the Upside
Majority of analysts have been optimistic about NVIDIA’s performance since the beginning of 2017 and raising their target prices quarter after quarter. The latest to join this group is Mitch Steves of RBC Capital Markets, which raised its target price to $250 from $240.
Mitch noted that the recent upgrade in target price is in the wake of NVIDIA’s recently reported overwhelming third-quarter fiscal 2018 results. He believes the stock is poised to carry this bullish momentum ahead, in turn boosting the company’s share price. Mitch in his note, which was covered by Marketwatch, wrote, "Overall, after a single quarter of out-performance the 2020 upside case increases by 10%."
Moreover, Mitch stated that increasing use of cryptocurrencies is driving demand for NVIDIA’s GPUs, as it helps create digital currencies like Ethereum, Monero, Cash and bitcoin gold. He believes the company will continue to witness demand for its GPUs from miners.
Other investment firms, which also raised their target price recently, include B. Riley and Mizuho. While B. Riley increased its target price to $270 from $250, Mizuho raised it to $225 from $220.
Most analysts believe NVIDIA will dominate the Artificial Intelligence (AI) chip market in the near future, similar to its performance in the gaming and data center markets. A few months back, Bank of America Merrill Lynch’s analyst, Vivek Arya, and Evercore ISI’s analyst — C.J. Muse — noted that NVIDIA is well poised to dominate the AI market.
Arya, in a note written to clients, had mentioned, “Similar to other large successful tech industries, we expect the $30bn AI chip market to also feature one dominant supplier – we think NVDA.” On the other hand, Muse noted that the company is well poised to get the “first-mover advantage” and will continue maintaining its sturdy presence in the AI training system.
Bottom Line
NVIDIA remains one of the best performers in the semiconductor space. Given the accelerated momentum in AI, gaming, datacenter and automotive technology, we believe this Zacks Rank #1 (Strong Buy) stock, with long-term EPS growth estimate of 11.2%, will continue to rally in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.
Many might argue that NVIDIA, with its hefty forward P/E valuation of 52.6x, compared with the industry average of 20.3x, is a risky bet. Nevertheless, we beg to differ as high valuations and increasing share prices do not necessarily indicate that the stock does not have much upside potential left.
NVIDIA has grabbed attention with striking performances on the back of impressive earnings results and strong growth projections.
Furthermore, with its continued efforts toward attaining robust position in several emerging industries such as AI, deep learning and driverless cars industry, NVIDIA has outpaced other competitors in the space, including Advanced Micro Devices (AMD - Free Report) , Intel Corp. (INTC - Free Report) and STMicroelectronics (STM - Free Report) , in terms of growth.
Therefore, we believe investing in this stock will yield promising returns for your portfolio in the short term.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Will NVIDIA (NVDA) Rally Past the $250 Mark Anytime Soon?
Shares of NVIDIA Corporation (NVDA - Free Report) have been up more than 100% this year. This is a very good ride when, you, as an investor, intend to cash in on the gain. However, we would suggest you to think twice, as the stock has plenty of potential to ride higher and generate more solid returns over the next few months.
Given the recent optimism surrounding the stock, we believe it is just a matter of some months that the stock will breach the $250 mark.
In fact, the company, between its Q2 and Q3 earnings results (Oct 10 to Nov 9), gained approximately 25%. Therefore, given its splendid Q3 results, the $250 mark is still a conservative view, as this only represents a 15% upside from Friday’s closing price of $216.96.
Shares of NVIDIA have gained a whopping 103.3% year to date (YTD). If you still haven’t taken advantage of this appreciation yet, this is the right time to add the stock to your portfolio. Notably, NVIDIA has substantially outperformed the industry to which it belongs to, which has gained 47.2% YTD.
Bullish Analysts’ View to Aid the Upside
Majority of analysts have been optimistic about NVIDIA’s performance since the beginning of 2017 and raising their target prices quarter after quarter. The latest to join this group is Mitch Steves of RBC Capital Markets, which raised its target price to $250 from $240.
Mitch noted that the recent upgrade in target price is in the wake of NVIDIA’s recently reported overwhelming third-quarter fiscal 2018 results. He believes the stock is poised to carry this bullish momentum ahead, in turn boosting the company’s share price. Mitch in his note, which was covered by Marketwatch, wrote, "Overall, after a single quarter of out-performance the 2020 upside case increases by 10%."
Moreover, Mitch stated that increasing use of cryptocurrencies is driving demand for NVIDIA’s GPUs, as it helps create digital currencies like Ethereum, Monero, Cash and bitcoin gold. He believes the company will continue to witness demand for its GPUs from miners.
Other investment firms, which also raised their target price recently, include B. Riley and Mizuho. While B. Riley increased its target price to $270 from $250, Mizuho raised it to $225 from $220.
Most analysts believe NVIDIA will dominate the Artificial Intelligence (AI) chip market in the near future, similar to its performance in the gaming and data center markets. A few months back, Bank of America Merrill Lynch’s analyst, Vivek Arya, and Evercore ISI’s analyst — C.J. Muse — noted that NVIDIA is well poised to dominate the AI market.
Arya, in a note written to clients, had mentioned, “Similar to other large successful tech industries, we expect the $30bn AI chip market to also feature one dominant supplier – we think NVDA.” On the other hand, Muse noted that the company is well poised to get the “first-mover advantage” and will continue maintaining its sturdy presence in the AI training system.
Bottom Line
NVIDIA remains one of the best performers in the semiconductor space. Given the accelerated momentum in AI, gaming, datacenter and automotive technology, we believe this Zacks Rank #1 (Strong Buy) stock, with long-term EPS growth estimate of 11.2%, will continue to rally in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.
Many might argue that NVIDIA, with its hefty forward P/E valuation of 52.6x, compared with the industry average of 20.3x, is a risky bet. Nevertheless, we beg to differ as high valuations and increasing share prices do not necessarily indicate that the stock does not have much upside potential left.
NVIDIA has grabbed attention with striking performances on the back of impressive earnings results and strong growth projections.
Furthermore, with its continued efforts toward attaining robust position in several emerging industries such as AI, deep learning and driverless cars industry, NVIDIA has outpaced other competitors in the space, including Advanced Micro Devices (AMD - Free Report) , Intel Corp. (INTC - Free Report) and STMicroelectronics (STM - Free Report) , in terms of growth.
Therefore, we believe investing in this stock will yield promising returns for your portfolio in the short term.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>