NVIDIA: A Powerhouse in AI and Graphics Technology Grows Stronger
Santa Clara, California-based NVIDIA Corporation (NVDA) stands as a leading innovator in computer graphics and AI technology. The company offers solutions in graphics, computing, and networking, serving a global clientele. With a market cap of $3.6 trillion, NVDA is involved in several advanced areas including scientific computing, AI, data science, autonomous vehicles, robotics, the metaverse, and 3D internet applications, while also focusing on personal computer graphics.
Stellar Performance Outshining Broader Market
This chip giant has seen its shares significantly outperform the wider market over the past year. NVDA has experienced a remarkable gain of 200.5% during this period, compared to the S&P 500 Index ($SPX), which has risen by nearly 35.9%. In 2024 alone, NVDA stock is up 193.3%, marking a significant lead over the SPX’s 25.8% increase on a year-to-date basis.
Comparison with Semiconductor ETFs
Looking closer, NVDA’s performance appears less pronounced against the iShares Semiconductor ETF (SOXX), which has appreciated approximately 36.8% over the past year. Nevertheless, NVDA’s year-to-date gains outshine the ETF’s 17.5% returns for the same timeframe.
Blackwell Architecture Launch Sparks Revenue Growth
The company’s recent success can be attributed to the introduction of its Blackwell architecture, which features their best-performing chip to date. NVIDIA intends to ramp up production in response to strong demand, aiming to generate substantial revenue from this new platform. The high interest in Blackwell chips currently exceeds supply, leaving customers eagerly anticipating their availability. With expectations of billions in revenue forthcoming from the Blackwell launch, this initiative is set to drive significant growth for NVIDIA.
Strong Q2 Earnings and Positive Forecast
On August 28, NVDA shares experienced a slight decline of over 1% after the release of its Q2 results. The company reported revenue of $30 billion, surpassing analyst predictions of $28.8 billion. Additionally, NVIDIA’s adjusted earnings per share (EPS) was $0.68, beating forecasts of $0.64. For Q3, NVDA anticipates a revenue of $32.5 billion.
Analyst Ratings and Future Speculations
Analysts forecast that for the current fiscal year, ending in January 2025, NVDA’s EPS will grow by an impressive 125.4% to $2.66 on a diluted basis. Historically, NVIDIA has consistently exceeded consensus estimates in each of the last four quarters, highlighting its strong performance record.
Among the 42 analysts monitoring NVDA stock, the general consensus is a “Strong Buy.” This rating includes 36 “Strong Buy” recommendations, two “Moderate Buys,” and four “Holds.”
This outlook represents an improvement over two months ago, when 35 analysts rated it as a “Strong Buy.”
Price Targets Reflect Strong Growth Potential
On November 11, Mizuho reaffirmed an “Outperform” rating for NVDA, raising the price target to $165. This adjustment implies a potential increase of 13.6% from current valuation levels. The average price target stands at $151.36, reflecting a 4.2% premium over NVDA’s present price. However, the highest target on the market is set at $200, indicating possible growth of up to 37.7%.
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On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
