Nvidia Stock Surges on Monday Morning

Nvidia Stock Surges on Monday Morning

Actions of Nvidia (NASDAQ:NVDA) surged higher on Monday, jumping as much as 5.2%. As of 11:07 a.m. ET today, the rally had moderated somewhat, although the stock was still up 0.5%.

The catalyst that propelled the chipmaker higher was growing confidence in its artificial intelligence (AI) prospects on Wall Street, leading to two price target increases.

A huge opportunity

HSBC Analyst Frank Lee maintained his Buy rating on the stock while increasing his price target to $1,050. That suggests a potential upside of more than 20% from Friday’s closing price — and on top of the stock’s 500% gains since the start of 2023. The analyst cited Nvidia’s expansion beyond units graphics processing units (GPUs) to central processing units and software to power its AI-centric processors.

Not to be outdone, analysts at Truist maintained a Buy rating on the shares, while raising their price target to $1,177, which would represent 34% upside potential. The company cited Nvidia’s “culture of innovation, legacy business ecosystem, and massive investments in software, services, and models” as the reason for the company’s growing lead in the field of AI. Analysts went so far as to call Nvidia “THE AI company.”

Host the “AI Woodstock”

This growing confidence comes as Nvidia kicks off its annual GPU Technology Conference (GTC) today. The company is expected to unveil the next generation of Generative AIproduct-centric products.

The highly anticipated B100 aims to become the world’s most advanced and powerful AI processor, and it could double the capabilities of its predecessor, the H100. Investors are waiting to hear from CEO Jensen Huang, who is expected to deliver the keynote speech later today.

This highlights Nvidia’s relentless innovation, which has helped propel the company to become a leader in providing processors used for generative AI.

After Nvidia’s meteoric rise over the past year, investors began to wonder whether the rally could continue. The stock currently trades at 36 times forward earnings and 17 times forward sales, putting some shareholders on the sidelines.

However, management is forecasting triple-digit year-over-year growth for its first fiscal quarter 2025, which ends at the end of April. Growth of this magnitude certainly deserves a premium, suggesting that investors are preparing for the wild ride ahead. Nvidia stocks are a buy.

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HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Danny Vena has positions at Nvidia. The Motley Fool ranks and recommends Nvidia and Truist Financial. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.

Why Nvidia stock exploded Monday morning was originally published by The Motley Fool

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