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Nvidia’s Growth Prospects Justify Price Target Increase, Analysts Say

Nvidia (NASDAQ:NVDA) has seen its longer-term growth prospects and profitability metrics bolstered, prompting analysts at Stifel to revise their price target for the artificial intelligence chipmaker.

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In a client note released on Tuesday, analysts announced an upward adjustment of Nvidia’s price target from $114 to $165 per share, factoring in the company’s recent decision to implement a ten-for-one stock split.

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The revised target reflects Stifel’s projections, estimating Nvidia’s stock to trade at approximately 40 times the expected earnings per share of $4.10 for fiscal 2027.

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“We expect the majority of near-to-medium term opportunities will come from high performance computing, hyperscale and cloud data center, and enterprise and edge computing,” the analysts asserted. They highlighted Nvidia’s transition from general-purpose computing to accelerated compute as a pivotal driver of revenue and profitability growth in the coming years.

However, the note also underscored potential risks to the updated price target, including a possible digestion period following significant investment phases, unforeseen U.S. trade restrictions on technology exports to China, and broader macroeconomic events.

On Tuesday, Nvidia’s stock price surged over 3% to reach $135.58, surpassing software giant Microsoft (NASDAQ:MSFT) in market capitalization to become the world’s most valuable company. The California-based company added more than $110 billion to its market cap, equivalent to the entire market value of Lockheed Martin (NYSE:LMT).

Previously recognized primarily for gaming-oriented chips, Nvidia has transformed into a leader in artificial intelligence over the past two years. CEO Jensen Huang has positioned Nvidia at the forefront of what he terms a new “industrial revolution” poised to reshape the global economy.

The substantial increase in Nvidia’s share price, which has soared by approximately 170% year-to-date, has significantly contributed to broader market gains. About one-third of the S&P 500’s 14% rise in 2024 can be attributed solely to Nvidia’s performance.

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