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Santa Clara, California-based NVIDIA Corporation (NVDA) is a key innovator of computer graphics and AI technology. The company provides graphics and compute and networking solutions. With a market cap of $3.6 trillion, NVDA develops a platform for scientific computing, AI, data science, autonomous vehicles, robotics, metaverse, and 3D internet applications, as well as focuses on PC graphics by serving clients worldwide.
Shares of this chip giant have significantly outperformed the broader market considerably over the past year. NVDA has gained 200.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.9%. In 2024, NVDA stock is up 193.3%, surpassing the SPX’s 25.8% rise on a YTD basis.
Zooming in further, NVDA’s outperformance looks less pronounced compared to the iShares Semiconductor ETF (SOXX). The exchange-traded fund has gained about 36.8% over the past year. Moreover, NVDA’s gains on a YTD basis outshine the ETF’s 17.5% returns over the same time frame.
NVDA's recent success can be credited to the launch of its new Blackwell architecture, which boasts the company's best-performing chip ever. Nvidia aims to increase production and generate significant revenue during this period. The high demand for Blackwell chips has exceeded supply, resulting in customers eagerly awaiting the new platform. With the company's optimistic forecast for billions in revenue from the Blackwell launch, it is expected to be a key growth driver for Nvidia.
On Aug. 28, NVDA shares closed down more than 1% after reporting its Q2 results. Its revenue was $30 billion, surpassing analyst estimates of $28.8 billion. The company’s adjusted EPS of $0.68 exceeded analyst estimates of $0.64. For Q3, NVDA expects revenue to be $32.5 billion.
For the current fiscal year, ending in January 2025, analysts expect NVDA’s EPS to grow 125.4% to $2.66 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 42 analysts covering NVDA stock, the consensus is a “Strong Buy.” That’s based on 36 “Strong Buy” ratings, two “Moderate Buys,” and four “Holds.”
This configuration is more bullish than two months ago, with 35 analysts suggesting a “Strong Buy.”
On Nov. 11, Mizuho kept an “Outperform” rating on NVDA and raised the price target to $165, implying a potential upside of 13.6% from current levels.
The mean price target of $151.36 represents a 4.2% premium to NVDA’s current price levels. The Street-high price target of $200 suggests an upside potential of 37.7%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
