Where is a Target Area for NVIDIA?
NVidia not only stays unsurpassed as the AI-fuelled rally bellwether, but it now gets the official title of the most valuable company on Wall Street. Indeed, NVIDIA's market cap reached $3.34 trillion to surpass the long-time leader Microsoft with its $3.32 trillion. This happened despite the owner of the Windows operating system and Azure cloud service set its all-time high above $450 per share this week. However, the pace of NVIDIA stock's growth is just amazing as the holder of more than 80% of the global AI chip market added another 35% since the last decade of May when it first time surpassed a $1000 barrier. Apple is nominally the third giant in terms of market cap, though it is lagging behind by "poor" $100 billion or so, as the iPhone maker's business rose by nearly 13% for the same monthly period.
NVidia's decision to make a ten-for-one stock split additionally boosted the retail investors' demand. The fact it now costs about $135 instead of $1350 is easing access for crowds, while reputable investment houses continue to raise their target prices for NVIDIA as well. In their note to clients, even a rather sceptical group of Stifel analysts lifted their price estimate for NVidia's share to $165 from a previous level at $114, taking into account longer-term "profitability metric", with expected fiscal 2027 EPS (earnings per share) of $4.10 vs nearly $1.28 in 2023. Stifel mentioned three risk factors like a "potential digestion period following several quarters of significant investment", a possible tightening of US trade restrictions on technology shipment to China and "general macro events". Producing critical components for AI models like ChatGPT and its analogues by other giant developers may pave the path for "near-to-medium term opportunities" due to "high performance computing, hyperscale and cloud data centre, and enterprise and edge computing", they admitted.
Meanwhile, another well-known financial advising company, Rosenblatt Securities, even dared to pull their NVidia price target from $140 to $200 per share, a new Wall Street high. “We see NVidia's Hopper, Blackwell, and Rubin series [of next generation chips and graphic processing units computing platforms] driving "value" market share in one of Silicon Valley's most successful silicon/platform product cycles,” while the "real story is in the software that improves the hardware capabilities", they commented, probably betting on a more speedy growth of software aspects in the overall computing technology sales. Therefore, Rosenblatt sees NVidia's possible achievement of $5.00 EPS or even more by the end of 2026.
We adhere to a more or less balancing targets between the avid optimists and moderate sceptics, basing on the middle between $160 and $200, i.e. in the range between $175 and $180, also bearing in mind the nearest area in the vicinity of $150 as an intermediate short-term goal, which will almost certainly be achieved this summer.
The triad of NVIDIA, Microsoft and Apple advances towards next sky-high levels like having seven league boots on their feet. This also helped the major S&P 500 barometer of Wall Street to come right up to a widely discussed milestone at 5,500 points. And this is unlikely the limit. However, betting on the brightest representatives of the AI segment still looks like a more promising option compared to purchasing the S&P 500 futures right at the moment.
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