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The Street
The Street
Business
Ian Krietzberg

Top analyst says Nvidia stock has room to go even higher in 2024

The proof to many investors that 2023 was indeed the year of artificial intelligence revolves around Nvidia (NVDA) -), the semiconductor firm that sells the computer chips needed to build AI-powered products. 

Nvidia beat earnings expectations every quarter of 2023 thus far, and its stock has risen in reflection of that; shares of Nvidia are up around 240%, more than triple for the year. 

The company's third-quarter beat, in which Nvidia posted $18.12 billion in revenue, well above the $16.2 billion expected by analysts, convinced several investors that Wall Street's AI excitement was more than just hype. 

Related: Human creativity persists in the era of generative AI

Wedbush Securities analyst Dan Ives called the report a "jaw-dropper," and Deepwater's Gene Munster noted that the " case for the AI party to continue through 2025 is compelling."

The company said that it expects to see $20 billion in revenue for the current quarter. 

The rapid growth of Nvidia's stock, according to senior Bernstein analyst Stacy Rasgon, represents the core worry investors have for Nvidia: longevity. 

"The numbers are getting so big so quickly you worry about sustainability," he told CNBC. "You can't prove that it won't happen."

Still, Rasgon noted that the stock is the cheapest it's been in about a decade, not because of the value it's trading at, but because of its value compared to estimates — "even though (the stock has) gone up, estimates have gone up much, much more," he said. 

And despite questions of sustainability, Rasgon is "enormously bullish" on the opportunities in AI and accelerated compute that Nvidia provides. 

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"I still suspect numbers for Nvidia are going to go up," he said.

Rasgon has a $700 price target for Nvidia.

He added that, long-term, the semiconductor sector on the whole is a "great industry." 

"They are increasingly important, both functionally as well as strategically," he said. 

Nvidia has an average price target of $661, according to TipRanks. The stock has an average "buy" rating.

Shares of Nvidia rose 1% Tuesday to $493.29, not far from its 52-week high of $505.48 notched last month. 

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