Nvidia Stock Price Forecast as Wall Street Pro Sees a $5 Trillion Valuation

Key Insights:

• Dan Ives, a top Wall Street analyst, believes the Nvidia stock price will hit $204.
• He cited the strong market opportunity for AI, hitting a $500 billion in revenue.
• Technical analysis shows that it may need to flip $200.

NVIDIA’s stock price has pulled back and plunged by over 7% from the year-to-date high amid concerns about its growth and valuation. It has erased over $300 billion in value in this period. Still, Dan Ives, a popular Wall Street analyst, believes that it will jump to $5 trillion valuation.

Dan Ives is Highly Bullish on Nvidia Stock

Wall Street analysts are largely mixed about Nvidia stock, especially after the company published its recent financial results. One analyst, Jay Goldberg of Seaport Global, believes that it may crash to $100, citing its valuation and its warning that its growth was slowing.

However, Dan Ives, a Wedbush analyst who covers technology, believes that the stock is still in its early days despite its surge in the past few years. He cited its dominant role in the artificial technology industry and potential emerging areas.

Ives sees Nvidia as the first company to ultimately reach the $5 trillion market cap. With the Nvidia stock price trading at $170 and its market cap being $4.15 trillion, it would need to jump to $204 to achieve this target.

Ives is not the only analyst who believes the Nvidia stock price will surge in the coming months. According to TipRanks, the average target price among Wall Street analysts is $211 within the next 12 months. At that price, its valuation would be over $5.12 trillion.

The most optimistic analyst sees the NVDA tick jumping to $250, a move that would make it a $6.075 trillion company.

Risks and Opportunities for NVDA

The most bullish case for Nvidia stock price is that its growth has more room to run. Data compiled by Yahoo Finance shows that the average revenue estimate is that Nvidia’s revenue will jump by 55% in the current quarter to $54.59 billion.

They then saw the company grow by the same percentage in Q4 to $61 billion, bringing its annual figure to $206 billion. Therefore, even when Nvidia’s revenue slows, Ives argues it will jump to $500 billion in the next five years.

If this happens, and if it maintains its profit margin of 52%, its annual profit will be over $250 billion, making it one of the most profitable companies globally.

However, the company still faces major risks ahead. The biggest Nvidia risk is that its products are concentrated in the data center business, while three clients account for almost 50% of its revenue. As such, losing one client could have a major implication for the business in the near term.

The other major risk is that Chinese companies like Alibaba, Huawei, and Cambricon are working hard to create their own semiconductor to rival Nvidia’s chips. While its chips are superior today, there is a chance that those made by the Chinese will keep closing the gap. Losing China will be a major thing for Nvidia, as it is the biggest market for chips.

Nvidia Share Price Technical Analysis

The daily timeframe chart shows that the Nvidia stock price has moved horizontally in the past few weeks. It has remained inside the narrow channel between the support and resistance levels at $170 and $184.

On the positive side, it remains above the 50-day and 100-day Exponential Moving Averages (EMA). Therefore, while there is a potential for further downside, there is a risk that it will surge past $200, especially when the Fed starts cutting interest rates.

Summary

The NVDA stock price has moved sideways in the past few weeks amid concerns about its growth and valuation. However, based on Dan Ive’s estimate, there is a likelihood that it will have a strong bullish breakout, potentially to the psychological level at $200 and above. However, there is also a risk that it will move to the 100-day moving average at $156 and then resume the upside.

Disclaimer

This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.