Nvidia (NASDAQ: NVDA) has been a darling of Wall Street, with 92.86% of analysts giving the stock a “Buy” rating as of October 2024.
Out of 42 analysts, 39 recommend buying, while only 3 suggest holding, and none are advising to sell. Wall Street analysts offered 12-month price targets for Nvidia, with an average target of $153.86 and a high forecast of $200.00, suggesting a 7.15% upside from its current levels, with some analysts predicting even more significant gains.
This overwhelming optimism stems from Nvidia’s leadership in AI and the company’s ability to innovate and recover from production challenges, such as the recently resolved issues with its Blackwell AI chips.
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The stock is trading at $143.59 as of the market close on October 22, and despite a minor dip in pre-market trading, Nvidia’s future outlook remains bright.
Blackwell Chip design flaw fixed
One of the key drivers of Nvidia’s future growth lies in its highly anticipated Blackwell AI chips, initially unveiled in March. The chips were set to ship in the second quarter of 2024 but faced delays due to a design flaw.
CEO Jensen Huang admitted during an announcement on Wednesday that the flaw affected production yields but emphasized that it has since been resolved.
“We had a design flaw in Blackwell,” said Huang. “It was functional, but the design flaw caused the yield to be low. It was 100% Nvidia’s fault.”
With the help of Nvidia’s longtime manufacturing partner TSMC (Taiwan Semiconductor Manufacturing Company), the company has recovered from the yield issues and is ramping up production once again. Nvidia aims to ship the Blackwell chips in the fourth quarter of 2024, with major customers like Meta, Google, and Microsoft eagerly awaiting the product.
Analyst sentiment is a ‘Strong Buy’ for NVDA stock
Out of 42 analysts, 39 have issued a “Buy” rating, 3 have a “Hold,” and 0 have a “Sell” rating. Analysts are overwhelmingly bullish on Nvidia, citing its leadership in artificial intelligence, gaming, and data centers as reasons for its continued dominance.
Investment firms such as Bank of America Securities, DBS, and TD Cowen have recently reaffirmed their bullish outlook on Nvidia. Notably, Bank of America raised its price target from $165 to $190, highlighting the company’s strong market positioning and the significant opportunities ahead. Nvidia’s stock is currently hitting fresh 52-week highs, further signaling strong momentum and investor confidence.
With shares trading near the high end of their $115.14 – $144.42 range over the past month, Nvidia’s stock performance remains in line with the broader market, as the S&P 500 Index also trades near new highs.
The Blackwell Chip: A game changer for AI?
Nvidia’s Blackwell chips represent a significant leap forward in AI technology. The chip takes two squares of silicon, each the size of Nvidia’s previous offerings, and binds them into a single, highly efficient component. This design is expected to deliver a 30x performance increase in tasks such as serving up answers from AI chatbots.
“In order to make a Blackwell computer work, seven different types of chips were designed from scratch and had to be ramped into production at the same time,” Huang explained.
“What TSMC did, was to help us recover from that yield difficulty and resume the manufacturing of Blackwell at an incredible pace.”
What’s next for Nvidia shares?
Nvidia’s strong fundamentals and the recovery in Blackwell chip production could set the stage for further stock price appreciation.
With major partnerships, technological advancements, and continued analyst optimism, Nvidia seems poised for a bright future.
Whether the stock hits the high-end price target of $200 remains to be seen, but for now, Nvidia remains a strong buy for many on Wall Street.
