Is NVDA Stock Really Worth an $800 Price Tag?
On surface level, Mosesmann’s anticipation of NVDA stock eventually hitting $800 a pop seems almost recklessly optimistic. Within the past two days, most analysts have issued buy ratings with a $500 price target, which implies about 15% upside potential. On the other hand, the Rosenblatt analyst’s forecast calls for a near doubling of the share price.
Fundamentally, though, it’s not out of the question for NVDA stock to reach such an astounding height. True, shares presently trade at a forward earnings multiple of 57.71x, significantly above the semiconductor sector’s median forward multiple of 25.8x. At the same time, Nvidia commands intense demand for its graphics processors.
During the second-quarter earnings call by electric vehicle giant Tesla, CEO Elon Musk told analysts that the company will take as many Nvidia processors as it can produce. Such underlying buying pressure helps to explain why Nvidia felt comfortable raising its fiscal Q2 guidance beyond the Street’s expectations.
However, the main problem now is that Nvidia can’t feed everyone’s orders as quickly as they would like. Certainly, it’s a great problem to have. However, management is likely worried that the increased lead times for its AI products may enable rivals Intel and Advanced Micro Devices to catch up. $Advanced Micro Devices(AMD.US$ $NVIDIA(NVDA.US$ $Direxion Daily Semiconductor Bull 3x Shares ETF(SOXL.US$
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