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

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.

Tweet on Nvidia stock surge

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.


Image: Nvidia