Is Nvidia Stock a 'No-Brainer' Headed to $1,125? Analyst's Perspective
Nvidia Stock Potential Reaches New Heights
A price target of $1,125 might seem ambitious, especially after the stock's recent gains, but the evidence suggests a clear path to that number. There's no denying that artificial intelligence (AI) has gone viral over the past year or so, with graphics processing units (GPUs) by Nvidia (NASDAQ: NVDA) fueling the fire. In recent weeks, however, the stock has stalled, and investors are wondering what's to come.
Influencing the Market
- Melius Research analyst Ben Reitzes reiterated his buy rating on Nvidia stock while raising his price target to $1,125.
- Microsoft and Alphabet announced plans to increase capex spending to support cloud growth fueled by generative AI.
Reitzes references the current AI 'gold rush,' saying the large cloud providers 'are all spending ~20% more on chips than we thought over the next few years.' He goes on to say they're 'spending like crazy' now, hoping they can 'monetize like crazy' later. 'Sometimes a no-brainer is a no-brainer,' he wrote.
Dominance and Growth
- If you don't believe it, consider this: Nvidia is the leading provider of the GPUs used in data center processing where much of AI systems reside, with an estimated 95% market share.
- While Nvidia stock is a bit pricey, selling for 35 times forward earnings, the company's triple-digit growth and market dominance make it worth every penny.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.