A Bright Future Ahead for Nvidia Stocks
Nvidia stocks (NVDA) have experienced a tremendous growth of 239% in 2023 and continue to perform well in January. Currently trading above the buying plan level at $505.48, many wonder if the best days for these stocks have already passed.
As an IBD 50 company, Nvidia has reported significant sales and profit growth in the last two quarters. The third-quarter results, ending on October 29, showed a 206% increase in sales to $18.12 billion, surpassing analysts’ estimates of $16.19 billion. Profits soared by an impressive 593% to $4.02 per share, surpassing predictions of $3.37 per share.
The company has announced that the fourth-quarter earnings conference call will take place on February 21. Nvidia is projecting sales of $20 billion for this period, suggesting a 231% growth compared to the previous year, surpassing the street’s forecast of $17.96 billion.
Analysts predict a 239% growth for Nvidia in the entire fiscal year of 2024, with expected earnings of $11.32 per share. The growth rate is projected to slow down to 69% in the fiscal year of 2025, still resulting in earnings of $19.13 per share according to FactSet estimates.
What factors favor Nvidia stocks? Firstly, KeyBanc analysts recently raised the price target for Nvidia to $740 from $650. Oppenheimer analysts also maintained an “outperform” rating for Nvidia stocks with a price target of $650, emphasizing the company’s leadership in hardware and installed software, making it a key player in the field of artificial intelligence.
Furthermore, Nvidia has strong orders for the upcoming six months and plans to introduce new AI chips in the third quarter. The company also boasts high ratings, with a Composite Rating and EPS Rating of 99 and a Relative Strength Rating of 98, confirming its position among the top 2 semiconductor groups and ranking 16 out of 197 industry groups on the IBD list.
Nvidia stocks have garnered attention from investment fund managers. American Century Focused Dynamic Growth Fund (ACFSX) and MFS Growth Fund (MFEGX) hold Nvidia stocks in their portfolios. The Technology Select Sector SPDR Fund (XLK) ETF also has Nvidia stocks. Currently, the company ranks among the top seven largest firms by market capitalization, and it is closing in on Amazon (AMZN), occupying the fourth spot. Stock prices are also nearing the record level of $628.49.
The prolonged upward trend may stem from various factors such as excellent financial results, new technologies, and positive outlook as forecasted by market analysts. If Nvidia can sustain these factors, its future remains promising.
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