Can it rise another 63%? Wall Street sets NVIDIA's highest target price at $1200!
NVIDIA's stock price rose on Friday, with the company's stock price soaring 47% year-to-date and a staggering 230% in the past year. Analysts say that NVIDIA is in the "front end" of a multi-year cycle and is expected to meet the expected growth in the next two fiscal years.
Loop Capital analyst said on Friday that the strong momentum of NVIDIA, which has been in the spotlight recently, is far from over. The firm gave NVIDIA a "buy" rating and set the highest target price on Wall Street at $1200.
NVIDIA's stock price rose by about 2% before the market opened on Friday, but the gains narrowed after the market opened. It rose by 1.26% during the trading session, closing at $735.71. The company's stock price has risen significantly by 47% this year and skyrocketed by 230% in the past year. The target price of $1200 represents a 63% upside potential for NVIDIA.
The analyst mentioned the internet bubble in the 1990s, saying, "We will party like it's 1995!"
The analyst said that the reason for setting such a high target price is because NVIDIA is believed to be in the "front end" of a multi-year cycle, as investors bet on its prospects in artificial intelligence and the transition from supercomputing centers to larger-scale graphics processing unit computing. The analyst compared this phenomenon to the "tone of internet construction" in the mid-to-late 1990s when internet adoption rate increased fivefold from 1995 to 2001.
The analyst stated that this phenomenon is expected to help drive NVIDIA's stock price to the consensus target price estimated by analysts in the next two fiscal years. By 2023 alone, NVIDIA's GPU business opportunity could reach $150 billion.
"While we acknowledge that there will be more chip suppliers (including unlisted companies as well as AMD and Intel) and specific internal semiconductor solutions for supercomputing centers in the coming years, our research indicates that NVIDIA's largest customers will consume all the products the company can offer them in 2024 and 2025," the analyst wrote.
The analyst also stated that these trends should benefit NVIDIA as the company seeks ways to harness artificial intelligence, transfer more data to the cloud, and increase information technology spending and budgets. The analyst pointed out that the proportion of enterprise IT budgets is expected to increase from 30% in 2023 to 45%.