"Exciting Closing Gain" NVIDIA, next step is a $4 trillion market value? Wall Street calls for a target price of $1606!
NVIDIA narrowly avoided a decline overnight, possibly because investors chose to play it safe before Powell's speech. What does an extremely high target price mean? NVIDIA still has a 240% upside potential! Analysts are shouting, "I'm still being conservative," so why are they so optimistic? They believe that the AI business can continue to grow!
After the performance surge, Nvidia almost closed lower, but Wall Street remains confident in Nvidia!
Overnight, Nvidia's stock price rose more than 5% at one point, and finally closed up 0.1% by a narrow margin. The reason may be that the previous increase was too high, and investors were worried that the speech by Federal Reserve Chairman Powell at the Jackson Hole Central Bank Annual Meeting would become a heavyweight bomb for the U.S. stock market, so they chose to take profits.
Nevertheless, Nvidia, which has risen more than 222% this year, still firmly sits in the trillion-dollar market value club, with a market value of about $1.2 trillion, approaching Amazon's $1.36 trillion and Google's $1.64 trillion, but still has a certain gap with Apple's $2.8 trillion.
However, Wall Street analysts are convinced that Nvidia's market value will exceed Apple's peak of $3 trillion, and even approach $4 trillion, setting a new milestone!
Chaim Siegel, an analyst at Elazar Advisors, set Nvidia's stock price at $1606 in the latest research report. Based on the latest closing price, this price means that the stock still has a 241% upside!
Why such optimism?
First of all, after Nvidia's data center revenue, including artificial intelligence (AI), increased from $4.3 billion in the first quarter to $9.2 billion in the second quarter, the market generally expects a slowdown in the third quarter after the significant acceleration in the previous two quarters.
However, the above-mentioned analyst does not think so, especially after Nvidia saw the accelerated growth in AI chip demand. Moreover, Siegel's earnings per share forecast for Nvidia in 2024 is $35.69, which is much higher than the market's current expectation of $10.42.
According to FactSet data, as of Thursday, Nvidia's estimated price-earnings ratio is 35 times. Siegel's figure is 45 times, which is closer to the stock's recent valuation level. After multiplying the earnings per share by the price-earnings ratio, the price is about $1606.
Even more exaggeratedly, this analyst even said, "I still think I am too conservative."