The dictionary’s definition of ‘unstoppable’ could easily be attributed to Nvidia (NASDAQ:NVDA). The stock has been powering along, driving the market’s AI-themed rally, constantly adding gains, and delivering one master class after another in its earnings reports over the past year. Year-to-date, Nvidia shares have surged by 66%, reaching record highs of approximately $820.
According to Tigress Financial’s Ivan Feinseth, a 5-star analyst rated in the top 3% of the Street’s stock pros, there’s fat chance of the winning streak coming to an end anytime soon as Nvidia remains “at the forefront of the ongoing acceleration and tipping point of AI adoption across all industries and enterprises that will continue to drive significant revenue and cash flow growth and greater shareholder value creation.”
With that as backdrop, Feinseth rates NVDA shares a Buy, while raising his price target from $790 to $985, suggesting the stock has room for growth of ~20% over the coming year. (To watch Feinseth’s track record, click here)
At the core of Nvidia’s success lies its Data Center segment, home to its best-in-class AI chips. In the recent report for the January quarter, the segment’s revenue surged by a significant 409% year-over-year to a record $18.4 billion. Given the array of collaborations Nvidia offers, further gains should be anticipated.
These collaborations include partnering with Google to introduce enhancements across Nvidia’s data center and PC AI platforms for Gemma, Google’s open language model. Additionally, Nvidia has expanded its strategic partnership with Amazon’s AWS by hosting NVIDIA DGX Cloud on AWS. In the healthcare sector, where opportunities might seem somewhat under the radar, Nvidia is extending its presence. It has disclosed that Amgen will utilize the NVIDIA DGX SuperPOD to advance insights in drug discovery, diagnostics, and consumer medicine.
There has also been a recovery for the Gaming segment, once Nvidia’s primary business but now overshadowed by the Data Center. In the latest report, Gaming revenue surged by 56% y/y to reach $2.9 billion as the company rolled out the GeForce RTX 40 SUPER Series GPUs, enabled by the most up-to-date NVIDIA RTX technology, such as DLSS 3.5 Ray Reconstruction and NVIDIA Reflex. Nvidia also unveiled microservices for the NVIDIA Avatar Cloud Engine, allowing game and app developers to seamlessly incorporate cutting-edge generative AI models into non-playable characters. The number of AI-powered RTX games and applications utilizing NVIDIA DLSS, ray tracing, and other NVIDIA RTX technologies has now exceeded 500. Introduced less than six years ago, NVIDIA RTX has rapidly evolved into a substantial PC platform for generative AI, embraced by 100 million gamers and creators.
Summing up, Feinseth says Nvidia should be a “core holding in the AI investment theme and one of the best ways to play the accelerating adoption of AI into all types of technologies and applications.”
Feinseth is far from the only NVDA bull on Wall Street. 37 other analysts join him in the bull camp, thoroughly outnumbering the 2 skeptics, and all resulting in a Strong Buy consensus rating. Going by the $886.52 average price target, a year from now, shares will be changing hands for ~8% premium. (See Nvidia stock forecast)
To find good ideas for stocks trading 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 featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
