'Ride the Nvidia wave.' Wall Street says the 'undeniably pricey' stock can keep roaring
By Emily Bary
Nvidia's stock still has far more room to run despite 'monster' rally, analysts say
Even with a 160% surge in Nvidia's stock this year, analysts recommend that investors stay firmly aboard the train.
Yes, Nvidia's stock (NVDA) now trades at more than 50 times forward earnings after its monster year-to-date rally, but estimates have come up as well in the wake of Wednesday's earnings report, which brought an eye-popping outlook fueled by heavy customer spending on artificial-intelligence products.
"Everyone has been looking for ways to play AI that aren't as expensive as NVIDIA given the run this year," Bernstein's Stacy Rasgon wrote in a note to clients. "However, perhaps NVDA itself is the best way to accomplish that (while still undeniably pricey it is clearly not quite as expensive as it looked) and the narrative, backed up by actual products and sales, still has legs in our opinion."
Rasgon boosted his price target on the stock to $475 from $300. Nvidia shares closed at $379.80 Thursday after a 24% jump.
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Plenty of companies have talked about their various AI tailwinds, and plenty of stocks have gotten boosts from the theme in recent months. But Nvidia's ability to quickly show how that buzz has translated into real revenue seems to be the difference.
"We believe this is just the beginning of a paradigm-altering generative AI wave and, so far, it seems that NVDA is the one capturing nearly all the economics," wrote Barclays analyst Blayne Curtis, who rated the stock at overweight with a fresh $500 target, up from $275 before.
He recommended that investors "continue to ride the NVDA wave."
Read: 'Unprecedented' and 'unfathomable.' Nvidia makes jaws drop on Wall Street as stock explodes higher
Harlan Sur of JPMorgan doubled his price target, also moving to $500, while writing of "significant upside potential in shares."
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-Emily Bary
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May 26, 2023 08:15 ET (12:15 GMT)
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