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Can Nvidia Reach $2,000? The $2,000 Quest for Nvidia

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  The $2,000 Quest for Nvidia

By the end of 2022, the list of trillion-dollar companies was a pretty exclusive club. Apple, Microsoft, Saudi Aramco, and Google were the esteemed members, with Amazon knocking on the door. Nvidia, while leading the discrete GPU market, was nowhere near the $1T mark. It was a formidable player in the tech sector, though. In 2022, prices took a hit. The company was growing at a slower pace, with notable bumps in the data center segment due to increased demand from neural networks and AI training.

Analysts predicted that Nvidia, valued at about $364 billion by the end of 2022, could potentially triple its market cap and reach $1 trillion by around 2030. Fast forward — Nvidia soared past the trillion-dollar mark last year, becoming the 5th US company to join the $1T club, and has consistently exceeded expectations since then. The current market cap sits at $1.67 trillion, perhaps even more in pre-market trading. Prices show no signs of slowing, especially after its recent quarterly win.

A Trailblazing Legacy

Nvidia’s legacy in tech innovation dates back to 1999 when it launched GeForce 256, the “world’s first-ever graphics processing unit.” Then, eight years later, it pioneered the Compute Unified Device Architecture (CUDA) parallel-computing platform, redefining GPU performance and opening its products for general-purpose utilization, notably for artificial intelligence and machine learning algorithms.

Recent Triumphs

Nvidia reported a 265% revenue growth in its 4th-quarter report, totaling $22.10 billion, primarily driven by a 409% data center growth YoY, representing 83% of total revenue. The surging demand for high-performance chips to power AI platforms propelled the company’s growth.

Nvidia anticipates a $24 billion revenue in the next quarter, an 8% growth from the previous quarter. However, this guidance indicates a potential slowdown in 2024, considering the recent quarters saw a 22% and 32% growth, respectively.

A $2,000 Future for Nvidia (NVDA)?

Nvidia’s current valuation stands at $1.67 trillion, with after-market trading pushing the market cap past $1.7 trillion, around $771 per share. As for whether Nvidia can reach $2,000 soon, achieving a $4.94 trillion market cap, for context, Microsoft recently surpassed Apple’s market cap, standing at $2.99 trillion, with estimations of breaching $3 trillion this year. Nvidia reaching $2 trillion, or roughly $811 per share, next year seems plausible. It’s even trading around $760 before the bell opens. However, as for Nvidia hitting $2,000, the company’s growth, particularly its revenue, would need to continue at the same pace, which might not be feasible given its slowing growth guidance. Moreover, softened AI demands and heightened competition present significant risks.

Parting Thoughts

While reaching $2,000 might seem distant, it remains a compelling investment opportunity. Analysts recommend it as a Strong Buy, with high estimates reaching $1,200.

On the date of publication, Rick Orford 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.