‘Get ready for another rally,’ top analyst says of Nvidia stock

Anyone interested in the stock market can tell you that. Nvidia (NASDAQ:NVDA) has been the hottest name in the last year and a half. Given its position as the maker of the best AI chips and its dominance that’s reflected in a string of stellar quarterly reports, investors simply can’t get enough of the semi-giant. The result has been 12-month gains of over 200% and a podium spot as a member of the world’s three most valuable companies.

The question now is whether stocks still have room to improve. The good news, according to Cantor’s CJ Muse, a 5-star analyst ranked in the top 2% of Wall Street stock professionals, is that the answer is “a lot.”

“We’ve never seen a faster pace of technology innovation and cost reduction in compute than we are seeing today, all driven by NVDA and its full-systems approach,” Muse said. “This momentum is driving a strategic shift in the proliferation of AI today, with no signs of slowing down in the near future given accelerating product cycles (NVDA is now on an annual cadence), continued software innovation, and optimizations across the stack that are enabling significant scaling of the compute unit.”

Over the past decade, Nvidia has delivered a million-fold increase in AI performance, far surpassing Moore’s Law-style improvements and dramatically reducing computational costs to make AI more accessible. ChatGPT has been called the “AI big bang,” but Muse says we’re only at the beginning of the process. Future improvements in logic, multimodal functionality, and “culturally specific developments” will expand its use and demand.

Nvidia CEO Jensen Huang sees the potential for another million-fold increase in performance over the next ten years, suggesting Muse has a clear path to “AI omnipresence.” “As such,” the 5-star analyst continues, “we continue to see the company’s opportunities transform from a percentage of data center capex to a percentage of global IT spend and soon to a percentage of GDP expenditure. »

With the speed of innovation, its “already solid moat” is only getting stronger, leaving competitors perpetually playing catch-up. As a result, based on all of the above, Muse expects the stock to “push higher.”

In summary, calling the stock a “Top Pick,” Muse rates NVDA shares as Overweight (i.e. Buy) and raised its price target to $175 from $140, implying that the stock will grow another 41% over the next year. (To follow Muse’s track record, Click here)

Looking at the consensus breakdown, while 3 analysts have rated the stock a “Hold”, they are outpaced by 38 analysts who have given it a “Buy” rating, leading to a “Strong Buy” consensus. The forecast calls for a one-year return of 27%, with the average target currently at $157.86. (See Nvidia Stock Forecast)

To find good ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the analyst featured. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making an investment.