The numbers associated with the rise of Nvidia (NASDAQ:NVDA) stock speak for themselves. Over the past 5 years, the stock has gained more than 3,000%, that’s 35x over the S&P 500’s performance during the same period. This impressive growth is fueled by Nvidia’s top-tier AI chips.
The question as ever with such a monumental rise, is whether – regardless of real-world success – the stock is still primed for more gains or is now simply overvalued.
Looking at the situation, Steven Fiorillo, a 5-star investor ranked in the top 3% of TipRanks’ stock experts, has been ruing the fact he missed out on most of the incredible returns, but he makes the case there’s still enough juice to be squeezed here.
“While I missed out on one of the best gainers in any 5-year period, I think NVDA can go much higher over the next 5-10 years, and I don’t mind being late to the party,” said Fiorillo. “Despite the stock’s high valuation, Nvidia’s strong financials and potential for future growth make it an attractive investment opportunity, with the possibility of further share buybacks driving earnings growth.”
That valuation (currently trading at 48 times 2024 earnings and 30.45 times 2026 earnings) is not a “risk factor” for Fiorillo, who thinks that based on the huge growth seen at the semi giant and the expectation of future earnings growth, could actually make the stock quite cheap.
That said, while valuation is not a concern, there are other risks involved. “Potential competition” from other firms making their own line of chips to the possible drop in demand as infrastructure upgrades decelerate, are ones to be wary of.
On balance, however, Fiorillo strikes a bullish tone, noting: “The forward potential is exciting, and I believe that based on what NVDA has achieved, its current margins, and what could occur, shares are inexpensive today.”
Anticipating there’s more upside in the cards, Fiorillo rates NVDA shares a Strong Buy. (To watch Fiorillo’s track record, click here)
That is also the conclusion reached by Wall Street analysts. The stock boasts a Strong Buy consensus rating based on a mix of 37 Buys vs. 4 Holds. The average price target currently stands at $140.85, suggesting shares will gain ~10% from current levels. (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.
