Nvidia (NASDAQ: NVDA) dominated the market this year with its AI chips. The stock is already up 205% year to date, compared to the S&P 500’s 17% return during the same time, which makes everyone wonder — can Nvidia stock go higher?
Wall Street analysts believe it will. The demand for Nvidia’s AI chips is still strong, from Elon Musk and China to Saudi Arabia and the United Arab Emirates, corporations and nations are looking to stock up amid the shortage to build large language models.
The average analyst target price sees a 16% gain
Analyst consensus at TipRanks is a ‘strong buy’ for NVDA based on 32 analysts in the last three months. The average target price stands at $510 for the next 12 months, 16% higher than the current $437 per share.
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TipRanks analyst price target. Source: Interactive Brokers Fundamentals Explorer
Demand for Nvidia’s chips is growing. China’s internet giants recently ordered $5 billion worth of Nvidia chips and graphics processing units (GPUs), which are to be delivered in 2024.
Elon Musk was also buying the chips for his generative AI project xAI. Musk said that “Twitter [now X] and Tesla are certainly buying GPUs”.
Saudi Arabia and UAE are buying thousands of Nvidia chips to join the AI race, pushing demand for new chips.
Cloudflare CEO Matthew Prince said “a lot of constraint in getting” Nvidia’s H100 chips on a Q2 earnings call earlier this month.
NVDA stock technical analysis
After the Nvidia stock price reached new highs, Finbold mentioned that support levels of $435 and $400 are likely to be reached in the pullback. The first one was taken out, while the price came close to $400 on Monday, August 14.
The daily chart is now showing a potential shift in sentiment. The bullish engulfing pattern has negated the price action of the previous two trading days, aiming at $450 in the short term.
NVDA stock, daily price chart. Source: StockCharts.com
Unless something dramatic happens, it seems that $500 is within reach in the coming months.
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