Following Nvidia ‘s (NVDA) incredible quarter and strong guidance raise, we think shares of the AI-chip powerhouse can increase another 14% from its record highs in the next six to nine months. That’s generally our time horizon for a Club price target, which we’re boosting on Nvidia to $450 per share from $300. We’re keeping our 2-rating on the stock, which indicates we would want to wait for a pullback before buying more. No kidding, right? Nvidia closed Wednesday at $305 per share ahead of the amazing after-the-bell financials that pushed shares up as much as nearly 29% to Thursday’s all-time, intraday high of $394.80 each. It’s almost in the $1 trillion market cap club. Jim Cramer, a supporter of Nvidia since at least 2017, recently designated it the Club’s second own-it-don’t-trade-it stock. ( Apple was the first). Jim even renamed his dog Nvidia. Our new $450-per-share price target on Nvidia is about 45 times full-year fiscal 2025 (or calendar year 2024) earnings estimates. Nvidia has a weird financial calendar and Wednesday evening reported results for its fiscal 2024 first quarter. While 45 times isn’t cheap on a valuation basis at a little over two times the current valuation of the S & P 500, it’s only slightly above the 40 times average valuation that investors have placed on the stock over the past five. In our view, it’s more than justified when factoring in the runway for growth that Nvidia has in front of it. That’s what we are seeing Thursday as this latest round of upward estimates revisions also serves as a reminder that Nvidia, more often than not, has proven cheaper (or more valuable) than initially believed because analysts have been consistently overly conservative about the potential of Nvidia’s disruptive nature, which is now on full display as the undisputed leader in cards to run artificial technology. NVDA 5Y mountain Nvidia’s 5-year performance Jim has been singing the praises of Nvidia CEO Jensen Huang for years — not to mention…
Read the full article here