Analyst on Wall Street Predicts Nvidia's Share Price Reaching $178; Is It Wise to Invest?
Analyst on Wall Street Predicts Nvidia's Share Price Reaching $178; Is It Wise to Invest?
Nvidia (NVDA 1.92%) is on the verge of hitting new heights before its upcoming earnings report on November 20th. One analyst, Timm Schulze-Melander from Redburn Atlantic, thinks it's a good time to purchase shares, assigning a "buy" rating and setting a price target of $178. This suggests a potential increase of 21% from the current share price of $147.
Investors, however, might want to hold off until after the earnings release before making a decision.
Nvidia Needs to Deliver on Sky-High Expectations
Nvidia appears to be in the initial stages of satisfying demand for data center hardware that supports artificial intelligence (AI) tasks. Although its second-quarter revenue growth slowed down compared to the previous quarter, Nvidia still managed an impressive year-over-year increase of 122% in total revenue. This is quite remarkable for a leading semiconductor company.
Analysts tend to be more accurate in predicting a company's near-term financial performance compared to estimating stock price moves. According to Yahoo Finance, the consensus analyst estimate suggests Nvidia's revenue will increase by 125% this year followed by a growth of 44% the next year. The high demand for Nvidia's data center chips is projected to keep its profit margins healthy, and analysts also anticipate an earnings growth of 44% next year, reaching $4.12 per share.
However, it seems prudent to hold back on buying shares before the earnings report. The stock's recent rise following the August earnings report could potentially lead to a post-earnings selling spree.
No matter what Nvidia announces next week, the stock still promises long-term growth potential from the expanding AI chip market, which could take several more years to fully materialize. By waiting until after the news, investors can avoid any unexpected negatives that might cause the stock to decline post-earnings.
Investors might want to consider their financing options, as the potential increase in Nvidia's share price after the earnings report could provide an opportunity for profitable investing.
Post-earnings, it may be beneficial for investors who are bullish on Nvidia to review their overall investment strategy in finance, as any unexpected negatives could impact their portfolio's performance.