Nvidia Corporation (NASDAQ:NVDA) continues to dominate the semiconductor industry, particularly as the demand for high-quality chips for artificial intelligence (AI) applications grows rapidly. The company’s strong position in this space is expected to drive continued profits, making it an attractive long-term investment.
In 2023, Nvidia’s stock soared by an impressive 238%, significantly outperforming the Nasdaq Composite’s gain of 44.5%. This growth can be attributed to the increasing demand for AI-related technologies, as well as Nvidia’s commitment to product quality and innovation over the past two decades. In fact, the stock has delivered a remarkable 39,150% return over the last 20 years.
As of mid-February, Nvidia’s stock is up 46.6% year-to-date, outpacing the Nasdaq’s 6.8% increase. Analysts are optimistic about the company’s upcoming fourth-quarter and full-year results, particularly in its Data Center segment, which could drive further growth in the stock price.
Nvidia has reported strong financial results in the first three quarters of fiscal 2024, driven by high demand for its high-performance GPUs across various industries. In the third quarter alone, total revenue surged by 206% year-over-year to $18.1 billion, while adjusted EPS increased six-fold to $4.02.
Despite concerns related to U.S.-China trade tensions, Nvidia has found ways to mitigate potential impacts. The company plans to launch a modified gaming chip to comply with China’s import regulations, although it expects a slight impact on its Data Center segment revenue in the fourth quarter, as China accounts for a significant portion of that segment’s revenue.
Looking ahead, Nvidia management anticipates fourth-quarter revenue of around $20 billion, with analysts predicting revenue of $20.46 billion and earnings of $4.61 per share for the quarter. Analysts also estimate significant revenue and earnings growth for fiscal 2024, highlighting the company’s strong potential for the future.
Nvidia’s strategic partnerships in the automotive segment, particularly with Foxconn and various EV makers, further underscore its growth prospects. Analysts expect substantial revenue and earnings growth for fiscal 2025, indicating that Nvidia remains an attractive investment opportunity.
Analysts have raised their price targets for Nvidia stock, with Barclays and Oppenheimer both setting a target price of $850, and Loop Capital Markets initiating coverage with a target price of $1,200. Overall, the analyst community maintains a “strong buy” rating for Nvidia, emphasizing its long-term growth potential.
In conclusion, Nvidia’s dominant market position, strong financial performance, and strategic partnerships make it a compelling long-term investment. Despite its recent growth, the stock remains relatively inexpensive, presenting an opportunity for investors looking to capitalize on the company’s hyper-growth potential.
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Author Stephanie Bédard-Châteauneuf 