Nvidia’s $560 billion profit prompts Street Racing to raise its goals

(Bloomberg) — Nvidia Corp.’s red-hot rally. The start of 2024 has Wall Street rushing to keep up, with at least five companies this month raising their price targets for the artificial intelligence darling.

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Shares of the chip giant have risen 46% this year, adding about $560 billion in market value on Monday as they closed at a record high of about $722. This strength, as well as the insatiable demand for accelerators for AI tasks, led UBS Group AG and Mizuho Securities to join their counterparts at Morgan Stanley, Bank of America Corp. and Goldman Sachs Group Inc. followed suit, raising their price targets ahead of company earnings results due on Feb. 21.

This week, UBS raised its target to $850 from $580 and also raised its earnings per share estimates. Meanwhile, Mizuho raised its target to $825 from $625. Demand for Nvidia’s H100 AI accelerators continues to outstrip supply, Mizuho’s Vijay Rakesh wrote in a note to clients, calling the stock the best AI company.

The Santa Clara, California-based company’s stock, the best performer in both the S&P 500 and Nasdaq 100 indexes this year, has become one of the most popular stocks on Wall Street. Among analysts tracked by Bloomberg, there are 58 buy ratings, five hold ratings, and just a single sell rating.

Analysts, on average, have raised 2024 revenue estimates by more than 100% over the past 12 months, according to data compiled by Bloomberg.

And yet they’re struggling to keep up with the stock’s rise, which led to Nvidia briefly overtaking Inc. in market capitalization on Monday. Wall Street’s average 12-month price target of about $690 is about 4.5% below Monday’s closing price.

Nvidia lost about 2% in early trading on Tuesday, falling along with other major technology stocks after a report showed that U.S. consumer prices rose more than forecast last month.

The story goes on

(Updates shares in seventh paragraph.)

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Robert Wilson

Business & economics analyst. Breaking down intricate financial trends for informed decision-making.

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