1 Wall Street Analyst Boosts Nvidia Price Target by 47%: Here's Why They're Right


252bef2b33a3b369778adbe5be1d6a46

Nvidia Corporation (NASDAQ: NVDA) — the undisputed king of AI semiconductor chips — is priced at $727 per share. Blink and you might miss it. On Tuesday, investment bank UBS predicted that Nvidia’s price will reach $850, giving investors a 17% profit before the end of 2024.

Is it too late to buy Nvidia?

No, it’s not.

Even at $1.8 trillion in market capitalization, Nvidia could still gain even more. The stock looks pricey at 95 times trailing earnings, but most analysts agree that Nvidia is growing so fast that its forward P/E ratio stops at 35 times earnings. And with a projected long-term earnings growth rate of 35%, that actually sounds like a pretty fair price.

Is a 17% profit enough?

Raising its price target by 47% (since the last assessment), UBS now sees a further 17% profit in Nvidia stock through the end of this year.

Granted, any investor would prefer to earn a 217% profit on Nvidia stock than just 17%. But who’s to say Nvidia stock won’t go up 17% this year … and then keep on going up, perhaps even another 200%? UBS isn’t. Its new price target only looks out one year. But it’s only been a little over a year since ChatGPT was released for general use, making artificial intelligence the “new thing” in investing.

Considering how very early innings we are in the AI revolution, AI usage looks ready to skyrocket for years to come. And as AI gets used more, more AI chips will be needed to support that usage. Demand is so strong that UBS says Nvidia can raise prices on its chips, even as it grows supply. Nvidia dominates this arena with a market share of at least 80%, so the company looks poised for further growth.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 12, 2024

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

1 Wall Street Analyst Boosts Nvidia Price Target by 47%: Here’s Why They’re Right was originally published by The Motley Fool



Source link

About The Author

Scroll to Top