Nvidia Corp.’s stock has been a major outperformer recently, and the company’s latest results signal that the run-up is not over, according to some experts.
Nvidia shares are up 59% this year, while the S&P 500 is up approximately 4%, and the PHLX Semiconductor Index is up 16%.
Goldman Analyst Positive
“In retrospect, we accept that our choice to remain on the sidelines in anticipation of a decline in the company’s fundamentals was incorrect,” Goldman Sachs analyst Toshiya Hari said Thursday as he raised Nvidia’s shares from neutral to buy.
“The combination of positive estimate revisions and a probable expansion in the company’s multiple — comparable with previous recovery periods — will drive ongoing outperformance in the stock,” he added.
Hari is becoming increasingly optimistic about Nvidia’s opportunity in artificial intelligence, which was a prominent topic of discussion on Wednesday’s earnings call.
“With the recent emergence and likely proliferation of generative AI, we anticipate quickening the rate of Nvidia’s wallet-share rise within the context of overall cloud [capital expenditures] in the short to medium term,” Hari wrote.
Stacy Rasgon of Bernstein predicts more upside for Nvidia shares. “Given the stock’s run, we believe many were worried going into the print, but the results seem to reinforce the set-up from here, which is strong at this stage,” Rasgon wrote.
“Tactically, investors can now buy the company at the commencement of a datacenter ramp, with a strong (and roughly normalized) gaming trajectory,” according to the results.
Rasgon also mentioned that “additional pieces are now beginning to surface that can allow longer-term investors to dream the dream,” such as changes in AI software and Mercedes automobile software.
He upgraded Nvidia’s stock to outperform and raised his price objective from $200 to $265.
UBS Analysts Upbeat
Timothy Arcuri, an analyst at UBS, was similarly positive.
According to Arcuri, UBS has “always argued that NVDA is a product-cycle stock,” and the business is currently “on the threshold of what might be the strongest new-product cycles and [total addressable market] expansion in the company’s history.“
He acknowledged the existence of “other derivative ways to play AI,” but said that none of them compare to Nvidia.
UBS maintains its buy rating on the company and maintains its $270 share price target.
According to FactSet, 30 of the 45 analysts that cover Nvidia’s stock have buy ratings, 13 have hold ratings, and two have sell ratings.
The average price target for a share is $238.09.
Despite seeing “a lot to like” in the latest Nvidia figures, Wedbush analyst Matt Bryson maintained his neutral rating.
“We remain quite enthusiastic about the company’s longer-term opportunities and [its] posture in its key markets, but are somewhat apprehensive of the high valuation,” he wrote.
For More Stocks And Investment Related News, Click Here.
