Shares of Nvidia (NASDAQ: NVDA) rallied strongly in the morning trading on Thursday after the chip giant reported blockbuster earnings driven by robust chip demand. There is a high possibility that the company could reach a market capitalization of $1 trillion today as its current market capitalization stands at $932.6 billion.
The company’s blowout guidance of revenues of $11 billion in the second quarter shattered analysts’ estimates of $7.11 billion led to many analysts upping their price targets for the stock.
JP Morgan top-rated analyst Harlan Sur, while keeping a Buy rating on the stock, doubled its price target from $250 to $500, implying a 30.7% upside potential at current levels. Sur commented, “Generative AI and large language/transformer models are driving accelerating demand.”
Top-rated Wedbush analyst Matt Bryson echoed a similar view and upgraded the stock to a Buy from a Hold and raised the price target to $490 from $290. The analyst commented, “For any investor calling this an AI bubble (crypto, metaverse, now AI bubble thesis) we would point them to this Nvidia quarter and especially guidance which cements our bullish thesis around AI and speaks to the 4th Industrial Revolution now on the doorstep with AI.”
Even Nvidia’s CEO Jensen Huang stated on the company’s Q1 earnings call that the rise of generative AI has been its “iPhone moment” and that “all the technology came together and helped everybody realize what an amazing product that can be and what capabilities it can have.”
Analyst Bryson noted that opportunities in AI could be worth around $800 billion over the next 10 years. The analyst commented, “While this is an AI arms race being played out, its clear the AI revolution is not going away and remains one of the most investable tech themes we have seen in decades despite the near-term macro backdrop with debt ceiling and recession worries front and center.”
Overall, Wall Street analysts remain bullish about NVDA stock with a Strong Buy consensus rating based on 26 Buys and seven Holds.