Those considerably large profits mean the semiconductor giant has returned roughly a 20,000% to shareholders in the last decade. Therefore, a $500 investment in NVDA stock in May 2014 would be worth more than $100,000 today.
However, despite Nvidia’s monstrous profits, Analysts remain optimistic and expect stocks to rise further. After confirmation that analysts raised the outlook for the share price, the semiconductor firm’s shares react upward and climb more than 4%, two days before it presents its first quarter results.
According to a report by Seeking Alpha, the investment bank Jefferies just initiated coverage of Nvidia stock with a “Buy” rating. The analyst expects artificial intelligence to account for 25% of semiconductor sales by 2027, up from 5% in 2022. Additionally, Jefferies explained that cloud-based capital expenditures are increasing, acting as a tailwind for AI players like Nvidia.
The latest iteration of Nvidia’s AI processor is a GPU (graphics processing unit) called Blackwell, which was recently released. These processors are expected to perform AI tasks 2x faster and consume less power compared to Nvidia’s current Hopper chips.
Separately, HSBC analyst Frank Lee, reiterated its “Buy” rating on Nvidia and raised its price target on the stock from $1,050 to $1,350. The new target indicates upside potential of over 46% from current levels.
According to Lee, Nvidia enjoys strong pricing power on products such as server rack systems and processing platforms, which should allow the company to continue growing rapidly. What is the Earnings Forecast for NVDA?
Nvidia is expected to release its fiscal first quarter 2025 results (ended in April) on May 22. The consensus forecast calls for Nvidia to increase sales by 251% to $22.9 billion and earnings by 425% to $5.5 per share. By comparison, HSBC analyst Lee expects Nvidia to end the first quarter with revenue of $28 billion.
For the full fiscal year, analysts expect sales to rise 71.3% to $104.37 billion and earnings to grow 78% to $23.10 per share in fiscal 2025.
Can Nvidia Stock Reach $2,000?
Of the 40 analysts covering NVDA stock, 35 recommend “strong buy“two recommend”moderate purchase“and three recommend”keep“. The average 12-month price target for NVDA shares is $986.01, indicating an upside potential of less than 7% from current prices.. Investment bank Rosenblatt Securities has the highest 12-month price target of $1,400 for Nvidia shares.
Source: Ambito
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