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Based in California, NVIDIA Corporation (NVDA) stands at the forefront of visual computing technologies and AI solutions. With a staggering market cap of $2.9 trillion, the company excels in GPUs and drives advancements across gaming, professional visualization, data centers, and automotive sectors.
Shares of this chip giant have easily crushed the broader market’s gains over the past 52 weeks. NVDA has gained 139.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 19.1%. Also, in 2024, shares of NVDA are up 120.5%, compared to the SPX's 14.2% gains on a YTD basis.
Zooming in further, NVDA’s outperformance becomes even more evident when compared to the S&P Semiconductor SPDR's (XSD) marginal decline over the past 52 weeks and a 3.2% gain on a YTD basis.
NVIDIA's outperformance is driven by surging demand for its GPUs in AI applications and strong financial performance, including nearly doubling revenues and maintaining high net margins. The strategic launch of the Blackwell architecture and the company's dominance in accelerated computing have also contributed significantly to its stock growth trajectory.
However, in July, Nvidia and many other chip stocks hit a rough patch as investors shifted focus from soaring large-cap tech to lagging small-cap stocks. NVDA stock pulled back nearly 6.7% on Aug. 1 due to weak economic data, including a disappointing ISM manufacturing survey and rising initial jobless claims, which stoked fears of a potential recession. Additionally, the Federal Reserve's decision to hold interest rates steady contributed to the broader tech sell-off.
Nevertheless, for the current fiscal year, ending in January 2025, analysts expect NVDA's EPS to grow an astounding 114.4% year over year to $2.53. The company's earnings surprise history is also promising. It topped the consensus estimates in each of the last four quarters.
Moreover, Wall Street appears highly bullish on the stock. Among the 39 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 33 “Strong Buy” ratings, two “Moderate Buys,” and four “Holds.”
This configuration is slightly less bullish than three months before, with 34 analysts suggesting a "Strong Buy."
On Jul. 22, Piper Sandler's analyst Harsh Kumar raised the price target on NVIDIA to $140 and maintained an "Overweight" rating, citing strong business trends and anticipated growth from the upcoming Blackwell architecture launch, with potential for an above $2 billion revenue beat in the July quarter.
The mean price target of $141.29 represents a premium of 29.4% to NVDA's current levels. Meanwhile, the Street-high price target of $200, implies that NVDA could rally as much as 83.1%.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
