The breathtaking advances in the AI industry have propelled Nvidia (NASDAQ:NVDA) to astounding heights. Fueled by stellar earnings and promising guidance, the AI chipmaker’s shares have surged 138% in 2024.
The recent 10-to-1 stock split has brought the price per share down to more realistic levels for many prospective investors. However, following such a blistering pace of growth, one might ask whether now is the right time to invest in NVDA.
Tigress’ Ivan Feinseth, a 5-star analyst rated in the top 3% of the Street’s stock pros, believes the answer is a resounding “yes.”
“NVDA’s ongoing advanced GPU development, innovation, and new product introductions will drive further acceleration of Business Performance trends as NVDA remains at the forefront of AI adoption,” writes the analyst, who continues that “further upside in the shares exists.”
Feinseth points to a number of different developments that will continue to push the share price upwards, both throughout the AI industry and directly with Nvidia.
First, the analyst expects the generative AI market’s growth over the next decade to range from $1 trillion to potentially $2 trillion, reflecting a projected compound annual growth rate (CAGR) exceeding 40%.
Discussing the prospects for the uncontested market leader, Feinseth believes that Nvidia will continue to grow its data center dominance. The analyst also points to several other domains, such as healthcare, autonomous vehicles, and cloud-based gaming, where NVDA has the potential to grow its revenues.
Feinseth argues that the company is well-placed financially to take advantage of these lucrative opportunities, while also rewarding shareholders.
“NVDA’s strong balance sheet and cash flow enable it to fund growth-driving initiatives through ongoing innovation and strategic acquisitions and enhance shareholder returns through ongoing dividend payments and share repurchases,” Feinseth summed up.
To this end, Feinseth rates NVDA as a Strong Buy, while increasing his 12-month price target to $170 (from $98.50). At current levels, this target would represent a gain of ~44%. (To watch Feinseth’s track record, click here)
The consensus on Wall Street mirrors Feinseth’s bullish outlook, with 38 Buy ratings and 3 Holds, resulting in a Strong Buy consensus rating for Nvidia. The average 12-month price target of $156.35 indicates around 32% upside potential. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
