‘Nvidia Has to Be a Bubble’: 7 Analysts Give Their NVDA Stock Forecasts

U.S. technology giant Nvidia has stunned the stock market by revealing a 265% increase in fourth-quarter revenues to $22.1 billion. 

Jensen Huang, its founder and chief executive, credited the rise to surging global demand for accelerated computing and generative artificial intelligence.

The upbeat announcement pushed the Nvidia stock price up 14% to $772.90 in pre-market trading on Thursday.

Caption: Nvidia 1-Year Performance Chart.
Caption: Nvidia 1-Year Performance Chart. Source: TradingView

But what is next for Nvidia? 

In our Nvidia stock forecast for 2024, we look at the reasons for the increase in Nvidia earnings and whether analysts believe it’s sustainable.

Key Takeaways

  • Technology company Nvidia has reported record fourth quarter revenues of $22.1 billion – 265% higher than the same period last year.
  • Jensen Huang, Nvidia’s founder and chief executive, declares accelerated computing and generative AI have reached a “tipping point.”
  • Revenues for the current quarter are expected to be even higher at $24 billion thanks to surging demand across the world.
  • The announcement on Wednesday evening resulted in the stock price rising 14% to $772.90 in pre-market trading on Thursday.
  • Wall Street analysts predict the stock price could hit $810.15 over the coming year – 20% higher than its last closing price of $674.72.

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Nvidia Earnings: Historic Surge Continues

The starting point for our NVDA stock forecast is looking at the company’s background and how it has generated blockbuster fourth-quarter revenues.

Nvidia is currently the world’s sixth-largest company, with a market cap of $1.66 trillion, according to CompaniesMarketCap. 

Nvidia announced record fourth quarter revenues of $22.1 billion, up 22% on the previous quarter and a remarkable 265% higher than the same period a year ago. 

In a statement, Jensen Huang, its founder and chief executive, predicted that revenue for the current quarter was expected to be $24 billion.

“Accelerated computing and generative AI have hit the tipping point,” he said. “Demand is surging worldwide across companies, industries, and nations.”

He also pointed out that Nvidia RTX introduced less than six years ago, had become a massive PC platform for genitive AI that was enjoyed by 100 million gamers and creators.

“The year ahead will bring major new product cycles with exceptional innovations to help propel our industry forward,” he added.

Nvidia Q4 Fiscal 2024 Summary

Q4 FY24 Q3 FY24 Q4 FY23 Q/Q Y/Y
Revenue $22,103 $18,120 $6,051 Up 22% Up 265%
Gross margin 76.0% 74.0% 63.3% Up 2.0 pts Up 12.7 pts
Operating expenses $3,176 $2,983 $2,576 Up 6% Up 23%
Operating income $13,615 $10,417 $1,257 Up 31% Up 983%
Net income $12,285 $9,243 $1,414 Up 33% Up 769%
Diluted earnings per share $4.93 $3.71 $0.57 Up 33% Up 765%

Jensen Huang, founder and CEO
Jensen Huang, founder and CEO
Source: Nvidia

NVDA Share Price Analysis

Shareholders in Nvidia have every reason to have fallen in love with the technology company after its performance over the past year. 

The NVDA stock price soared more than 200% from $236.64 in early 2023 to an all-time high of $725.72 on Valentine’s Day, February 14, 2024. Although the price subsequently lost a bit of ground on concerns that its results wouldn’t live up to the lofty expectations, its gains are still impressive.

After the fourth quarter results announcement on Wednesday evening (February 21, 2024), the Nvidia stock price rose 14% to $772.90 in pre-market trading on Thursday. 

NVIDIA 5-year stock performance.
NVIDIA 5-year stock performance. Source: TradingView

Nvidia Stock Forecast 2024: What Are the Analysts’ Views?

What are the analysts’ latest Nvidia stock predictions

While the level of Nvidia earnings was expected to be good, analysts were delighted they were even better than expected.

Danni Hewson, head of financial analysis at AJ Bell, told Techopedia that her initial reaction to Nvidia’s results was one of relief.

“There had been this sense in the days leading up to it that investors could be in for a reality check,” she said. “Although the expectation was that the results were going to be good, the markets were wanting them to be stellar.”

The fact the company “knocked it out of the park” with better-than-expected figures, she pointed out, has caused tremendous excitement.

“The belief is that it’s a turning point, and AI is going to be this cash cow that investors have been banking on. Nvidia has consistently delivered and that’s made it the AI darling.”

The fact that Nvidia has predicted another bumper revenue increase for the current quarter has only served to increase the enthusiasm. 

“Investors have been wanting to see they want to see this kind of trajectory sustained and Nvidia is doing that now,” she added. 

Potential Headwinds to Consider

However, Hewson insisted it was important headwinds weren’t ignored. 

“I think governments are going to have to stick their necks out and start focusing in on this sector. There are also the US tensions with China.”

For the time being, though, there are potential upsides for Nvidia. Even with talk about possible recessions around the world and businesses feeling less confident, she pointed out, AI is an area where they’re still likely to focus attention as it’s so important.

“Nvidia is dominating this space and has become the poster child. It’s surging ahead and it doesn’t look at the moment that even those headwinds can slow it down significantly.”

Of course, there are question marks over its valuation – particularly the fact it has risen more than 200% over the past year.

Hewson believes that investors will need to be clear about what they think the company will be worth in 12 months – and how much they are willing to pay for a stake.

“At the moment, it’s going from strength to strength – but, as with all companies showing this kind of stellar growth, there is a ceiling somewhere, and investors need to be careful that they in their minds know what that ceiling is for them.”

Nvidia “Has to Be a Bubble”

Andrew Merricks, portfolio manager at IDAD Funds, also sounded a note of caution when it comes to individual stock selection, even though he believes the broader AI sector is attractive. He told Techopedia: 

“Nvidia has to be a bubble. It’s not sustainable. It can’t be. However, anything connected to AI is a good long-term investment.”

Merricks believes the stock’s growing prominence has been remarkable. 

“Nvidia wasn’t even heard about a year ago, and now it’s the results that everyone is looking out for,” he said. “It’s the bellwether, but any stock that has grown as quickly as it has done can’t continue. It has to plateau.”

Looking ahead, Merricks believes the company will eventually hit a difficult patch and underperform expectations.

“Whether Nvidia’s a good buy or not, I have no idea, but I wouldn’t be buying now – even though I might regret it. You can find other ways to play the market without putting it all on Nvidia.”

Providing a Boost to the ‘Magnificent Seven’ 

What can’t be denied is the remarkable story of Nvidia. Four years ago, it was valued at less than $100 billion; now it’s a $1.7 trillion giant, pointed out Jason Hollands, managing director of Bestinvest.

“The astronomical assent of Nvidia is truly a wonder to behold. Over 12 months the shares are up 225% and over five years an eye-popping 1,595%.”

Mr Hollands believes the “latest bullishness about Nvidia” will focus more attention on the so-called ‘Magnificent Seven’ companies – Alphabet, Apple, Amazon, Nvidia, Meta Platforms, Microsoft, and Tesla – that are seen as likely beneficiaries of the rise of AI. 

“AI offers game-changing potential for improving productivity and large companies that are either involved in providing the hardware or software, as well as those with access to the big data that AI will need to process, are well placed to benefit.”

Brian Colello, a strategist at Morningstar, has raised his fair value estimate for Nvidia from $480 to $730 due to the “tremendous rise” in AI computing demand. He wrote:

“Leading cloud computing companies plan to boost their capital expenditures to satisfy demand for artificial intelligence training and inference, and it appears that virtually all this spending will fall into Nvidia’s pockets.”

Undisputed Leader in Producing Chips

Nvidia is reaping the rewards of spotting the potential of AI, according to Charlie Huggins, manager of Wealth Club’s Quality Shares Portfolio.

“Nvidia was very early to recognize the transformative potential of AI and has invested heavily in this area for many years. As such, it has become the undisputed leader in producing chips that can perform complex AI tasks.”

Huggins believes Nvidia has become a “picks and shovels provider” in the emerging field of AI and is expected to perform strongly over the coming years.

“As long as companies pour more money into developing AI solutions, Nvidia stands to benefit handsomely. That’s a great position to be in.”

However, Huggins warned that Nvidia’s business has been subject to boom-and-bust cycles in the past, and investors needed to be aware that it operates in very fast-changing markets. 

“Longer-term, there are also question marks over just how embedded AI becomes in our everyday lives and whether Nvidia can maintain its lead as competitors scramble to catch up.”

Will Nvidia Stock Be Vulnerable?

Nvidia has “seriously captured the imagination” of investors who are scrambling to anticipate the huge financial benefits an AI boom could bring, according to Richard Hunter, head of markets at interactive investor.

“However, such stratospheric share price rises can come with a drawback. The bar has now been raised, meaning that the shares could be vulnerable to disappointment in subsequent upgrades as expectations have increased.”

Hunter is also concerned about the “heightened geopolitical tensions” between the US and China, having a potentially negative impact on Nvidia sales. 

“In addition, questions regarding appropriate tech valuations persist, while the concerns of many governments worldwide regarding the potential power of AI and its impact on human society warrant deep consideration,” he added.

Under Threat From Smaller Rivals 

Susannah Streeter, head of money and markets at Hargreaves Lansdown, believes Nvidia is in an enviable position as its powerful graphics processing units are in such high demand.

“It’s going to be hard to knock Nvidia off its perch given its first mover advantage, and with its long-term research pipeline positioning it to stay ahead. However, smaller rivals, and increasingly Nvidia’s big customers, are marching into the space,” she added. 

AI has the potential to transform a wide range of industries from healthcare to education, she pointed out, and Nvidia’s products provide the infrastructure backbone to the technology.

Of course, nothing is 100% guaranteed, and there are some dark clouds on the horizon.

“The company is having to grapple with regulatory challenges particularly the ban on the sale of high-tech chips to China, which could potentially have a material impact on its longer-term growth if strong demand wanes elsewhere.”

Nvidia Stock Forecast 2025: What Will Happen Next?

As far as an NVDA stock forecast is concerned, it’s classed as a ‘strong buy’, according to the views of 33 Wall Street analysts compiled by TipRanks

The average 12-month target price is $810.15, which would represent an upside of 20.07% over the last closing price of $674.71. 

However, opinions vary enormously. The highest Nvidia share price forecast puts it as high as $1,200, while the lowest would see it fall to $575.

The Bottom Line: Is Nvidia Attractive?

There is no doubt that Nvidia is enjoying a purple patch. It has become one of the leading names in the rapidly growing world of AI due to having the foresight to invest heavily in this area over the last few years. Today, it’s reaping the rewards of that stance.

Investors who have bought into the story have also been handsomely rewarded, with the stock price having risen around 200% over the past year.

Can the Rally Really Continue?

However, questions remain. Can the level of revenue increases continue? What will the stock market need to see for the stock price to soar yet again?

This is a fast-moving area and one that will increasingly attract innovative rivals that are hungry to take market share from Nvidia. It will be interesting to see how it responds to challenges.

There are also potential headwinds from the expected wave of governments introducing regulations in response to AI technology, as well as the ongoing geopolitical issues between China and the United States.

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Rob Griffin
Financial Journalist

Rob is a seasoned journalist with over three decades of experience spanning across business and finance journalism. Before embarking on a freelance career in 2002, he contributed his expertise to the business desks of notable publications such as the The Guardian, Yorkshire Post, Sunday Business (now Business Post), and Sunday Express. Throughout his freelance journey, Rob has been a regular contributor to a wide range of national newspapers, consumer magazines, trade publications, and websites. His work has appeared in titles such as The Independent, Citywire, Daily Express, FT Adviser, and Sunday Telegraph, covering an array of subjects from market trends…