Anyone interested in the ongoings of the stock market can tell you Nvidia (NASDAQ:NVDA) has been the hottest name out there for the past year and a half. Based on its position as the maker of the best AI chips, and its dominance resulting in a series of outstanding quarterly reports, investors just can’t get enough of the semi giant. The result has been 12-month gains over 200% and a place on the podium as a member of the three most valuable companies in the world.
The question now, however, is whether the shares have any more room to run. The good news, according to Cantor’s C.J. Muse, a 5-star analyst rated in the top 2% of the Street’s stock pros, is that the answer is “quite a bit.”
“We have never seen a more-torrid pace of technology innovation and subsequent reduction in cost of compute as we are seeing today – all driven by NVDA and its full system approach,” said Muse. “These dynamics are causing a strategic inflection in the proliferation of AI today, with no signs of slowing anytime soon given accelerating product cycles (NVDA now on annual cadence), continued software innovation, and optimizations across the stack allowing for a significant scale out of the compute unit.”
Over the past decade, Nvidia has increased AI performance by a million-fold, far outpacing Moore’s Law type improvements and significantly lowering compute costs to make AI more accessible. ChatGPT has been called the ‘big bang of AI,’ but Muse says we’re just at the beginning of the process. Future improvements in logic, multi-modal functionality, and “culturally specific evolutions” will expand its use and demand.
Nvidia CEO Jensen Huang sees the potential for another million-fold performance boost in the next ten years, suggesting to Muse a clear path to “AI ubiquity.” “As such,” the 5-star analyst goes on to say, “we continue to view the company’s opportunity morphing from a % of Data Center capex to a % of global IT spend and soon to a % of GDP spending.”
With the speed of innovation taking place, its “already-robust moat” is only getting further strengthened, leaving rivals to perpetually play catch-up. Accordingly, based on all the above, Muse expects the shares to “push higher.”
Bottom line, calling the stock a ‘Top Pick,’ Muse rates NVDA shares an Overweight (i.e. Buy), and raised his price target from $140 to $175, implying shares will post growth of another 41% over the next year. (To watch Muse’s track record, click here)
Looking at the consensus breakdown, while 3 analysts have rated the stock as Hold, they are outnumbered by 38 analysts who have given it a Buy rating, leading to a Strong Buy consensus. The forecast calls for one-year returns of 27%, considering the average target currently stands at $157.86. (See Nvidia 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.
