Nvidia (NVDA) stock is on fire, rising about 130% on a year-to-date basis and outpacing the Nasdaq composite index. This remarkable growth in Nvidia stock reflects strong demand trends with continued strength in its data center and gaming segments.
While Nvidia is benefitting from strong demand, its stock has witnessed a 10% decline in the last five trading days. The recent weakness stems from concerns that Nvidia’s ARM deal could fail. It’s worth noting that regulators in the U.S., U.K., and China have expressed concerns over competitive issues.
The U.S. Federal Trade Commission recently announced that it has sued to block Nvidia’s ARM acquisition.
Read more: Nvidia and Arm Merger Deal Blocked By FTC on Competition Grounds
Now What?
Even with the absence of the ARM deal, Nvidia could continue to gain from the ongoing strength in its data center and gaming divisions.
Highlighting the momentum in Nvidia’s business segments, Vijay Rakesh of Mizuho Securities raised his price target to $335 from $235.
The analyst stated that the DC (data center)/Gaming/Pro-Vis (Professional Visualization) markets are growing fast, and Nvidia’s dominant positioning in the AI (artificial intelligence) is helping to build “a deep competitive moat.” Rakesh maintained a Buy rating on Nvidia stock.
Similarly bullish on Nvidia is Rajvindra Gill of Needham. Gill expects Nvidia to be the “first $1T (trillion) semiconductor company.” The analyst’s bullish outlook reflects Nvidia’s “long-term growth, with the new Omniverse $100B software TAM (total addressable market), coupled with the $100B hardware data center TAM, and the company’s proven, strong FCF generation potential.”
Gill increased his price target to $400 from $245.
Stock Rating
Alongside Rakesh and Gill, most Wall Street analysts have a bullish view on Nvidia stock. On TipRanks, Nvidia sports a Strong Buy consensus rating based on 24 Buys and 2 Holds.
TipRanks’ Stock Investors tool indicates that investors have a very positive outlook on Nvidia. The data shows that 4.0% of investors holding portfolios on TipRanks have increased their exposure to Nvidia stock in the last 30 days.
The average Nvidia price target of $360.17 implies 19.9% upside potential to current levels.
Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >
