Nvidia (NASDAQ: NVDA) stock’s on fire at the moment. This year, it’s up more than 100%.
Can it keep climbing? A lot of Wall Street analysts seem to think so. After the company’s recent Q1 results, more than 20 brokers increased their price targets for the chip designer.
Phenomenal earnings
On 22 May, after the US stock market closed, Nvidia posted its earnings for the quarter ended 28 April. And the numbers were phenomenal.
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Thanks to high demand for its artificial intelligence (AI) chips, revenue for the period came in at $26 billion, up a huge 262% from a year earlier.
Meanwhile, non-GAAP earnings per diluted share amounted to $6.12, up a staggering 461% year on year.
The next industrial revolution has begun – companies and countries are partnering with Nvidia to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center – AI factories — to produce a new commodity: artificial intelligence.
Nvidia founder and CEO Jensen Huang
It’s worth noting that Nvidia also announced a 10-for-one stock split – which will take place in June – to make its shares more accessible to investors.
In the past, tech stocks that have done these kinds of splits have generally performed well.
Price target increases
Now, on the back of these superb results, many analysts have raised their share price targets for the stock. On 23 May, these brokers raised their targets:
| Broker | Old price target | New price target |
| Wedbush | $1,000 | $1,200 |
| Citi | $1,030 | $1,260 |
| Wells Fargo | $1,150 | $1,250 |
| Cantor Fitzgerald | $1,200 | $1,400 |
| UBS | $1,150 | $1,200 |
| Benchmark | $1,000 | $1,350 |
| Morgan Stanley | $1,000 | $1,160 |
| Jefferies | $1,200 | $1,350 |
| Argus | $950 | $1,100 |
| Deutsche Bank | $850 | $1,000 |
| Craig Hallum | $850 | $1,250 |
| Raymond James | $1,100 | $1,200 |
| Truist Financial | $1,177 | $1,288 |
| Sanford C Bernstein | $1,000 | $1,300 |
| JP Morgan | $850 | $1,150 |
| TD Cowen | $1,100 | $1,200 |
| Wolfe Research | $1,200 | $1,250 |
| Goldman Sachs | $1,100 | $1,200 |
| Needham & Company | $850 | $1,200 |
| Bank of America | $1,100 | $1,320 |
| Evercore ISI | $1,160 | $1,310 |
| Mizuho | $1,000 | $1,180 |
| Piper Sandler | $1,050 | $1,200 |
| KeyCorp | $1,200 | $1,300 |
In total, there are 24 increases here. JP Morgan has the highest target price at $1,400.
Is Nvidia worth buying today?
Do these new analyst targets – most of which are above the current share price – mean the stock’s a ‘buy’ today?
Well, I think the answer to that depends on a few factors, including an investment horizon, risk tolerance, and existing position size.
For me, Nvidia is already a massive holding after its recent surge. Currently, it’s my fourth-largest individual stock holding. So, right now, I don’t need to buy any more shares.
However, if I didn’t own the stock, I might consider having a nibble at current prices, just to get some exposure to it. Given its dominant market position in the AI chip space, I’d want the stock in my portfolio. And, at present, it’s not actually that expensive given the level of growth (the forward-looking P/E ratio using next year’s earnings forecast is only 32).
However, I wouldn’t want to go ‘all in’ on it, especially after its huge gain in 2024. One thing to understand about Nvidia is that it can be very volatile. This is a stock that can fall 20% or 30% in the blink of an eye. I’ve witnessed this first hand as an owner. If bond yields were to rise in the months ahead, or a competitor launched a powerful new AI chip, we could be looking at that kind of fall.
Given the volatility, drip feeding money into this stock over time is the best way to play it, in my view. That’s what I’ve always done in the past and it’s paid off.
