In a year filled with excitement for the semiconductor giant, Monday, June 10 proved a particularly big day for Nvidia (NASDAQ: NVDA), given that the firm’s stock plummeted 90%, seemingly out of nowhere.
The stock price’s fall from over $1,200 to just above $120 is, however, less cause for alarm than for excitement as it stems from a 10-for-one stock split the company announced in May.
Though the decision is likely to have less of an impact than it would have in the eras before fractional stock ownership became commonplace, it nonetheless provided an additional gust of wind to NVDA’s sails.
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Nvidia could soon account for 15% of the S&P 500
In fact, even without the split, analysts have remained generally bullish on the blue-chip chipmaker, with some, like Evercore’s experts, believing it to be a ‘generational opportunity’ that may rise to account for between 10 and 15% of the S&P 500.
The forecast is in line with the opinion shared by another expert – Louis Navallier – who recently stated NVDA might muster a market cap of $5 trillion in the relatively near future – a valuation which would, should other firms remain relatively steady – ensure the chipmaker constitutes more than 10% of the S&P 500.
Additionally, whether Nvidia becomes more than one-tenth of the benchmark index, analysts remain highly bullish on its future prospects.
Analysts show tempered optimism for NVDA stock
The overall consensus for the stock, as retrieved from the stock analysis platform TipRanks, is that it is a ‘strong buy’ with 37 out of the 40 represented experts rating it as a ‘buy.’
At the same time, NVDA boasts no ‘sell’ ratings with the remaining 3 analysts being merely neutral on the stock.
Despite this, the actual price targets show a lack of confidence that Nvidia can retain the growth pace it has been experiencing since late 2022 – a pace that saw the company rise about $2.5 trillion in value in about 20 months.
Indeed, the overall 12-month price target for the semiconductor giant stands just 1.49% above 120.60 – Nvidia price today – at $122.69.
The relative caution in analysts’ approach is also highlighted in the two most recent price target revisions which, despite remaining highly bullish, constitute a reduction in the expected outcome of the upcoming 52 weeks of trading.
On June 10, the banking giant Barclays reduced its price target for Nvidia to $145 while, on the same day, Cantor Fitzgerald opted for an even lower $140.
Still, despite showing a certain weakening of confidence in NVDA stock’s continued ability to grow at a rapid pace, the two newest forecasts remain close to the street high – assigned by Bank of America (NYSE: BAC) – which, when adjusted for the split, stands at $150.
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