Even though $NVIDIA Corp(NVDA)$ stock price has skyrocketed by two times in the past year, investors are still underestimating this GPU king. Since the beginning of last year, AI has sparked a paradigm shift in tech, and no company has benefited more than Nvidia.
Nvidia's GPUs are the gold standard in AI, but some are worried about increasing competition. Toshiya Hari, an analyst from Goldman Sachs, has kept Nvidia on their "Strong buy list," maintaining a buy rating and bumping up the target price to $1,100.
That's a potential 22% gain for investors in the next year, compared to last Wednesday's closing price. This analyst believes Nvidia's processors will remain the industry standard for the foreseeable future.
He's got a point. Competitors have been trying to snatch the crown from Nvidia for years, but Nvidia's tech is unmatched in AI. Remember when Alphabet released their first TPU AI chip in 2015? And Amazon introduced their Inferentia AI chip in 2018?
Despite all that competition, Nvidia still reigns supreme. Why? They dedicate 20% of their 2024 fiscal year revenue to R&D, staying ahead of the competition by years.
Hari's survey reveals that AI server demand is still strong, fueling Nvidia's future profitability. So, he bumped up their non-GAAP earnings per share estimates for 2025, 2026, and 2027 by an average of 8%.
In addition, the analyst also believes that his peers are setting their profit targets too low for Nvidia, which will push the stock to another level.
Currently, Nvidia's forward P/E ratio stands at 36 times. Some may find it pricey, but this stock is worth a slight premium. After all, Nvidia is the real deal in AI!
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Earning is coming let’s see