NVIDIA hits historic high: what’s next?
$NVIDIA (NVDA.US)$ is on an impressive upward trajectory. The stock price reached historic highs twice last week and the momentum continued into this week with a 4% rally on Monday October 21, elevating its market capitalization above $3.5 trillion, making NVIDIA the second company to reach this milestone, following Apple.
Despite $ASML Holding (ASML.US)$ 's disappointing earnings casting a shadow on the semiconductor sector, NVIDIA's strong performance remains unwavering, supported by AI development.
On October 17, Bank of America analysts reaffirmed their Buy rating on Nvidia, raising the price target from $165 to $190, suggesting nearly 40% upside from current levels. They also boosted their 2025 and 2026 pro forma earnings per share (EPS) estimates by 13% and 20%, respectively.
Bank of America views Nvidia, which commands an 80-85% market share, as having a "generational opportunity" in a total addressable market (TAM) exceeding $400 billion, a significant increase from current projections.
Analysts' bullish outlook has been strengthened by recent industry developments, including $Taiwan Semiconductor (TSM.US)$ ’s strong report, AMD’s AI event, and high demand for Blackwell products, alongside Nvidia's solid competitive positioning.
Additionally, Bank of America’s growth projections indicate that NVIDIA's valuation remains appealing, with a 25-year PEG ratio (price/earnings to growth) of only 0.6, significantly lower than the average of 1.9 for other major U.S. tech companies.
From a technical analysis standpoint, NVIDIA has formed a W-shaped double bottom and has broken through previous resistance levels, generally viewed as a bullish signal. This pattern suggests a potential reversal from a consolidation phase into a new upward trend.
As we navigate through earnings season for U.S. stocks, while NVIDIA's earnings are typically scheduled for later, investors can monitor AI demand through the performance of other sector companies, such as $Advanced Micro Devices (AMD.US)$ , which is set to report earnings next week.
Furthermore, key downstream customers of NVIDIA, including $Microsoft (MSFT.US)$ , $Alphabet-C (GOOG.US)$ , and $Amazon (AMZN.US)$ , will also release their earnings, providing valuable insights into their performance and future capital expenditure plans. Moomoo Learn will deliver timely previews and analyses of these earnings reports, so be sure to stay informed.
Further Reading
The Bottom Line
In addition, it's essential to consider the broader economic context. Following the Federal Reserve's decision in September to cut interest rates by 50 basis points, subsequent employment and inflation data have consistently exceeded expectations. These mixed signals have created uncertainty about additional rate cuts, resulting in lowered expectations for aggressive cuts this year.
This shift may impact investors’ appetite for riskier assets like stocks while potentially increasing interest in alternatives such as gold and cryptocurrencies.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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1000proof : I need NVDA to break 225 by March 2025 and I’m golden
57AB : I always marvel about the wall street wise guys, market makers and palm readers who have predicted nonsense about what the market will do next. when they have missed it, they start ganging up to bully the market down so that they can have opportunity to get in. shameless market makers.
105742796 Learner : Oh good luck to all those who have shares here. I missed this.
Christopher Owens004 : Is it still to late to get in?
103251788 :
Jesse Romero 1000proof : That would be nice.
Tanmay Patil Christopher Owens004 : Lots of call options open rn, I personally would wait for volatility to drop from the 60s to the 40s regardless of stock price
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兴盛的伊登 : 170
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