Nvidia, a trillion $ worth chip company remains a ‘buy’ from analysts

Jun 2, 2023 thejournalbiz

The graphics chip maker has gained more than $650 billion in market value since October!

An investor craze for artificial intelligence has powered Nvidia’s dizzying rise and pushed the stock to lofty valuations.

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Even though it gained more than $650 billion in market value since October, @nvidia a trillion $ worth of chip company remains a ‘buy’ from analysts, Bloomberg reports#Nvidia #semiconductor #chip #ai pic.twitter.com/wsYPotY5pK

— The_Journalbiz (@the_journalbiz) June 2, 2023

Bloomberg chart on Nvidia

The graphics chip maker has gained more than $650 billion in market value since hitting a two-year low in October and briefly crossed the $1 trillion mark earlier this week.

Enthusiasm for Nvidia among stock pickers has only grown as investors have piled in. Of the 49 analysts surveyed by FactSet, 41 have a buy rating on the stock. That is up from 30 in October.

Their average 12-month price target on the stock falls just below $432, which implies gains of about 9% from Thursday’s close of $397.70. Price targets typically shift as analysts update their business forecasts.

Generative AI and a volatile world economy are giving investors reason to buy stock in winners such as Nvidia, explains WSJ’s Jon Sindreu. Photo: Getty Images

Nvidia’s surge picked up steam after the chip maker unveiled a blockbuster revenue target on May 24 for the quarter ending in July. The company expects to book $11 billion in sales, while the consensus forecast had called for roughly $7 billion.

The company “just did something that a lot of people, reflexively, don’t know how to explain,” said Hans Mosesmann, managing director at Rosenblatt Securities.

That has helped spark a rally throughout the chip industry.

The PHLX Semiconductor Sector Index, home to 30 stocks, has advanced 38% in 2023.