As Nvidia (NASDAQ: NVDA) approaches its second-quarter earnings release on August 28, 2024, the tech giant remains a focal point of investor attention. The stock has demonstrated significant resilience this year, boasting a year-to-date gain of 163% despite recent volatility.
However, this impressive performance has sparked concerns among some market analysts who fear that Nvidia might be in a bubble similar to the Dot-com bubble of the early 2000s.
These concerns have led to comparisons between Nvidia and Cisco (NASDAQ: CSCO), a technology giant whose stock experienced a dramatic rise and subsequent fall during the Dot-com era.
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ChatGPT’s prediction on NVDA stock price
Given these uncertainties, Finbold consulted ChatGPT-4o for an AI-driven prediction of Nvidia’s stock price and an analysis of the key factors influencing its future trajectory.
According to the AI analysis, Nvidia’s stock is predicted to reach $135 to $140 in the short term. This forecast is based on a detailed evaluation of Nvidia’s expected earnings, its dominant position in the AI chip market, and its ongoing innovation, even in the face of recent challenges.
The AI model’s bullish outlook is grounded in the belief that Nvidia’s fundamental strengths will continue to drive its growth despite market concerns.
Key factors driving NVDA stock price
Nvidia’s stock price is currently influenced by several critical factors as it approaches its highly anticipated second-quarter earnings report on August 28, 2024.
One of the primary concerns is the potential delay in the launch of Nvidia’s new Blackwell processors, which are expected to be faster, cheaper, and more efficient than their predecessors. This delay, reportedly due to design flaws, could lead to near-term volatility in Nvidia’s fundamentals.
The anticipation of this product line’s impact has already contributed to a 20% recovery in Nvidia’s stock price after it was initially hit by global market turmoil related to the yen-carry trade.
However, analysts, including those from Goldman Sachs (NYSE: GS) , remain optimistic that these processors will significantly boost Nvidia’s earnings power in 2025, reiterating its ‘conviction buy’ rating on Nvidia, setting a $135 price target, as Finbold reported.
In addition to the Blackwell processors, Nvidia’s stock price is also driven by the broader market demand for AI chips and processors, which remains strong. Despite concerns about potentially waning demand, key customers like Foxconn and Super Micro Computer (NASDAQ: SMCI) have reported healthy profits due to their investments in AI technology.
This continued demand is reflected in Nvidia’s current valuation metrics, with the stock trading at a trailing PE ratio of 75.93 and a forward PE of 43.75. While these valuation ratios are high, they still present a favorable risk/reward balance, especially given Nvidia’s commanding market share and the ongoing AI spending boom.
Nvidia stock price analysis
Meanwhile, Nvidia’s stock price currently stands at $130, with a one-day gain of over 4%, growing 163% since the beginning of the year, as per data on August 20.
As Nvidia approaches its earnings report, investors will be closely watching for any updates on the Blackwell processors, as well as the company’s ability to sustain its impressive growth trajectory in the face of these challenges.
The market’s response will likely hinge on Nvidia’s guidance and any further developments regarding its product pipeline and broader market trends.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
