Shares of chip giant Nvidia (NASDAQ:NVDA) have defied gravity to zoom up 13,066.49% over the past decade. This means if you invested in Nvidia 10 years ago, you would end up with a massive profit, as your $1,000 investment would be worth almost $131,664.9 as of November 23, 2023.
Nvidia’s success can be attributed to various factors, such as innovation, leadership in transformative technology like AI (Artificial Intelligence), and the ability to generate solid earnings and cash flows, being the most prominent ones. While Nvidia shareholders amassed significant gains, Wall Street analysts continued to show faith in the company and maintain a bullish view. Moreover, analysts’ average price target indicates further upside potential in NVDA stock.
With this backdrop, let’s examine what could boost Nvidia stock higher.
AI Demand to Propel NVDA Stock Higher
The rapid adoption and deployment of AI across businesses and sectors provides a multi-year and multi-billion-dollar growth opportunity for Nvidia. As Nvidia’s technology is considered the engine powering AI, the company maintains its dominance in that space. Given its leadership and focus on accelerating its product development cycle, Nvidia is poised to generate stellar revenues, supporting the ongoing uptrend in its share price.
It’s worth noting that Nvidia recently announced its Q3 financial numbers, wherein its top line was up 34% sequentially and more than 200% year-on-year. At the same time, its Data Center revenue came in at $14.5 billion, up 279% year-on-year. What stands out is that the Data Center segment’s revenue exceeded the total sales of Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC).
Looking ahead, Nvidia expects to deliver total revenue of about $20 billion (+/-2%) in Q4. This implies its top line will more than triple in the fourth quarter, reflecting benefits from solid demand for both computing and networking. Further, the momentum will likely be sustained in 2024 because of strong broad-based demand for Nvidia’s accelerated computing.
Will Nvidia Reach $1,000?
Wall Street analysts’ average price target indicates NVDA stock could rise 34.90% in 12 months to reach $657.17. Further, Rosenblatt Securities analyst Hans Mosesmann remains confident about the company’s prospects and expects Nvidia stock to surpass $1,000 to hit $1,100 in price over the next 12 months.
Further, Nvidia stock has 36 Buys and three Holds, reflecting a Strong Buy consensus rating.
Bottom Line
Nvidia has made its investors rich over the past decade. Further, analysts continue to show confidence in the stock and expect it to grow more. Notably, the significant appreciation in NVDA stock has raised concerns over its valuation. Nonetheless, NVDA’s rapid growth and AI leadership indicate that its premium valuation is warranted.
