Evercore ISI released a report this week saying that although Nvidia's stock price has soared more than 200% over the past year, the stock still has a lot of potential to rise.
Evercore rated Nvidia as “outperforming the market,” with a target price of $1,160, with a potential increase of 36% from current levels. The company believes that under a bull market scenario, Nvidia's stock price could soar to $1,540 next year, up 81% from current levels.
Evercore said that the reason it set such a high price target is because Nvidia is more than just a chip company, although most investors still just think so.
Evercore analyst Mark Lipacis (Mark Lipacis) said, “We think investors are underestimating: 1) the importance of the chip+hardware+software ecosystem created by Nvidia; 2) the computing era lasts 15-20 years, usually dominated by a vertically integrated ecosystem company, with returns between 100 and 1000 times.”
Lipasis' bullish key argument is that Nvidia is a player in an artificial intelligence ecosystem, a clear leader in new computing platforms that will drive efficiency improvements over the next few years.
Lipasis said, “These 'ecosystem players' usually account for 80% of the value created in their respective computing era, while other companies compete for the other 20%.”
Lipasis predicts that by 2030, Nvidia will account for 80% of the parallel processing market, which could be worth more than $350 billion. In this case, Nvidia's earnings per share will reach $69 by the end of this decade, compared to the company's earnings of $11.93 per share last year.
Lipasis said, “We believe that the structural transformation of the current parallel processing/IoT computing era began 5 to 8 years ago. Nvidia is the dominant ecosystem in the parallel processing sector, and this is only the beginning of huge returns for investors.”