Should I hold Nvidia stock?
Is NVDA a Buy, Sell or Hold? Nvidia has a conensus rating of Strong Buy which is based on 39 buy ratings, 2 hold ratings and 0 sell ratings. The average price target for Nvidia is $1,004.92. This is based on 41 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
The stock holds an Accumulation/Distribution Rating of B. That shows strong interest among institutional buyers over the last 13 weeks. Nvidia stock is a buy right now as it finds support at the 10-week moving average. Shares also appear to be forming a base that could be in place by week's end.
NYU finance professor Aswath Damodaran, known as the "Dean of Valuation," thinks Nvidia's fair value assuming a revenue CAGR of 32% over the next five years is $436. Nvidia's current share price is more than twice that amount.
NVDA Stock Forecast FAQ
NVIDIA stock prediction for 1 year from now: $ 1,887.44 (124.60%) NVIDIA stock forecast for 2025: $ 1,514.57 (80.23%) NVIDIA stock prediction for 2030: $ 28,802 (3,327.44%)
This analysis corroborates my initial assertion: Nvidia doesn't seem overvalued. When we look at forward multiples, NVDA's current ratios are actually below those observed over the past several years. Moreover, I'd like to compare NVDA's ratio to that of other dominant AI players, such as Microsoft (MSFT) .
Multiple catalysts make Nvidia a solid long-term buy. As the following chart shows, Nvidia's growth has taken off from the end of 2022. NVDA Revenue (Quarterly) data by YCharts. The company's data center business has played a central role in this growth.
Is NVDA a Buy, Sell or Hold? Nvidia has a conensus rating of Strong Buy which is based on 39 buy ratings, 2 hold ratings and 0 sell ratings. What is Nvidia's price target? The average price target for Nvidia is $1,004.92.
Although Nvidia stock has already gained substantially year-to-date, at least one Wall Street analyst expects the chip giant's stock to reach $1,400 - the Street-high price target - in the next 12 months. Let's explore why.
While future growth may not match the 126% revenue increase in fiscal 2024 (ended Jan. 31), analysts forecast 81% revenue growth in fiscal 2025 and 22% the next fiscal year, indicating the massive profit increases should continue for the foreseeable future.
Another market researcher, The Brainy Insights, expects a CAGR of nearly 38.2%. Even if we use the lower estimate, the demand for Nvidia's GPUs would soar more than 250% over the next five years. All the company has to do is at least keep pace with the overall AI chip market.
What will Nvidia be worth in 2030?
Assuming Nvidia is still trading at the same forward P/E, its stock price could reach $3,360 by the end of 2030, or 328% above the current share price. That would put its market cap at over $8 trillion.
As of 2024-04-18, the Intrinsic Value of NVIDIA Corp (NVDA) is 331.78 USD. This NVIDIA valuation is based on the model Discounted Cash Flows (Growth Exit 5Y). With the current market price of 840.35 USD, the upside of NVIDIA Corp is -60.5%. The range of the Intrinsic Value is 231.31 - 602.97 USD.
Fiscal Year 2024 Q1 earnings per share: 88 cents — 44.3% above investor expectations. FY 2024 Q2 EPS: $2.50 — 38.9% beat. FY 2024 Q3 EPS: $3.77 — 24.4% beat.
NVDA also boasts an average earnings surprise of 20.2%. Additionally, Nvidia's earnings are expected to grow 79.2% for the current fiscal year. Because stock prices react to revisions, buying stocks with rising earnings estimates can be very profitable.
Nvidia stock price crashed over 5.50% on Friday due to two major reasons — weakness in auto major, and disappointing US job date hitting Fed rate cut buzz, say stock market experts. Nvidia share price crashed over 5.50 percent on Friday and erased around $128 billion of investors.
But NVIDIA isn't in a bubble! The company's share prices aren't gathering momentum based on speculation but due to strong fundamental factors. The unquenchable demand for AI models is here to stay since it is a major driving force behind productivity gains across multiple industries.
So, if you had invested in Nvidia ten years ago, you're likely feeling pretty good about your investment today. According to our calculations, a $1000 investment made in March 2014 would be worth $172,169.75, or a 17,116.97% gain, as of March 1, 2024.
The valuation makes the stock an enticing buy
Meanwhile, Nvidia remains extremely cheap when you look at its price/earnings-to-growth ratio (PEG ratio). The PEG ratio is calculated by dividing a company's P/E ratio by the estimated annual earnings growth it could deliver.
To reach $10,000 by the end of 2025, Nvidia must generate a compound annual growth rate of nearly 300%. It seems outlandish and probably is, but if the company continues to deliver AI-fueled growth in 2024 and 2025, I'm not sure investors can count it out.
Nvidia is holding a Zacks Rank of #1 (Strong Buy) right now. With respect to valuation, Nvidia is currently being traded at a Forward P/E ratio of 36.07. Its industry sports an average Forward P/E of 24.84, so one might conclude that Nvidia is trading at a premium comparatively.
What is the long term forecast for Nvidia?
So, Nvidia's revenue is on track to increase 5 times in a space of five years considering its fiscal 2024 forecast, translating into a compound annual growth rate (CAGR) of 38%. A similar CAGR over the next five years would take Nvidia's annual revenue to a whopping $295 billion in fiscal 2029.
Tesla has a conensus rating of Hold which is based on 8 buy ratings, 19 hold ratings and 7 sell ratings. What is Tesla's price target? The average price target for Tesla is $184.86. This is based on 34 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
How much upside can investors expect over the next three years? Analysts are forecasting Nvidia's revenue to increase 80% in fiscal 2025 to almost $110 billion, followed by further gains in the next two fiscal years. Nvidia's revenue is expected to touch almost $150 billion in fiscal 2027.
Based on Nvidia's split history and its current price, a 2024 split is likely. Analyst Ken Mahoney, president and CEO of Mahoney Asset Management, agrees, although with a slightly longer timeline. Mahoney recently told Bloomberg News that he predicts Nvidia will split within 12 months.
Assuming Nvidia trades at 18 times sales after three years and hits $150 billion in revenue, its market cap could jump to $2.7 trillion, a jump of 37% from current levels. However, this AI stock is likely to deliver much stronger gains if the market continues to reward it with a premium valuation.
