Nvidia Climbs Despite Analyst's Target

Nvidia saw another surge on Friday following a significant increase triggered by strong earnings. The chip maker remains a standout on Wall Street, although UBS analyst Timothy Arcuri recently decided to lower his price target on the stock.

Stock Performance

• Nvidia shares were up by 2.1% in premarket trading at $801.50.
• The stock had risen by 16% the previous day, closing at $785.38 on Thursday.

Dominance in AI Hardware

Nvidia's dominance in providing hardware for artificial-intelligence systems has set it apart even from other leading stocks. Despite its impressive performance, some observers are keeping an eye out for any signs of a slowdown in its rapid growth.

Analyst Forecast and Target Price

UBS analyst Arcuri adjusted his target price on Nvidia to $800 from $850 post-earnings, noting a potential deceleration in revenue growth. However, he maintained a Buy rating on the stock. His revised target price was based on a 25 times price-to-earnings multiple of UBS' earnings forecast for Nvidia in 2025.

Analyst Insight

Arcuri expressed surprise over a slight decrease in total supply quarter-on-quarter, suggesting that Nvidia might be approaching a revenue "steady state" in the near future. He estimated that with no further supply increases, Nvidia could sustain revenue of approximately $27 billion per quarter.

Other Chip Maker Stocks

• Advanced Micro Devices showed a slight decline of 0.3% in premarket trading.
• Intel, on the other hand, was up by 0.6%.

Year-to-Date Performance

• Nvidia shares have already surged by 59% this year.
• In comparison, the S&P 500 index recorded a gain of 6.7% and the Nasdaq Composite Index increased by 6.9% over the same period.

For more information, contact Adam Clark.