NVIDIA Stock Has Slipped By 10% From YTD High As Pros Predict 46% Jump

NVIDIA (NASDAQ:NVDA) stock has underperformed the broader market this year. It has risen by 12% this year, while the tech-heavy Nasdaq 100 Index has soared by 20%. It remains 10% below its highest point this year, as analysts predict that it has more upside to go.

Wall Street Analysts See Nvidia Stock Soaring

Most Wall Street analysts are highly bullish on Nvidia shares despite the ongoing underperformance. Benzinga data shows that the consensus target of NVDA shares among analysts is $309, up by 46% from the current level. 

Some analysts expect the stock to rise even further. Tigress Financial has a price target of $425, while Baird’s Tristan Gerra sees it climbing to $500. Meanwhile, analysts at Evercore, Melius Research, and Cantor Fitzgerald project the shares could surpass $350 over the next 12 months.

There are some key reasons why these analysts see the stock continuing to rise. For one, its revenue and profitability growth are accelerating as the AI supercycle gains steam.

The most recent results showed that Nvidia’s revenue surged 85% year over year in the first quarter to $85 billion. Analysts expect revenue in the current quarter to rise 96% to $91.7 billion. Management has guided for revenue of about $91 billion this quarter. If this momentum continues, the company could generate roughly $400 billion in revenue this year.

The company will also benefit from the recent approval to sell its H200 chips in China. Also, it has recently launched its Vera CPUs, which it believes will be a $200 billion business. Vera will compete with other products of companies like Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC). 

Most notably, despite its ongoing growth, Nvidia still trades at a lower valuation multiple than the S&P 500 Index. It has a forward price-to-earnings ratio of 22.50, lower than the index’s 23. 

Technicals Point to an NVDA Stock Surge

NVDA stock price chart | Source: TradingView

The daily chart points to a strong Nvidia stock rebound in the near term. It has formed a descending channel, which is part of its bullish flag pattern. This pattern happens after a strong surge, which is followed by a descending channel. It resembles a hoisted flag. 

The stock has also remained above its 100-day exponential moving average, which has provided strong support. As a result, it could rebound in the near term. The initial upside target is the year-to-date high of $235. A break above that level would signal further gains toward analysts’ estimates of around $309.

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