Expert Financial Analyst Advocates for Nvidia as an Indispensable Investment Due to Unique and Rare Market Chance
Nvidia (NVDA) experiencing a remarkable journey over the past year, but it's been a rollercoaster ride. After skyrocketing an impressive 828%, the tech giant took a 27% plunge during the summer, only to bounce back and touch new highs just last week.
Given the anticipation for Nvidia's fiscal 2025 third-quarter report due next week, some investors ponder if the stock can maintain its lofty standing.
One Wall Street analyst deems Nvidia stock as an indispensable buy, suggesting selling now would be a massive blunder.
Melius Research advocates for purchase
Melius Research analyst Ben Reitzes kept his buy recommendation, upgrading his price target to $185 for Nvidia shares. This decision represents potential gains of 25% compared to the stock's closing price as of Tuesday. "Now, we're even more thrilled about Jensen Huang's next chip than we were before," the analyst expressed, comparing the enthusiasm to the hype surrounding Apple's (AAPL) groundbreaking iPhone release – fifteen years ago.
He further illustrated, "Relinquishing on Nvidia now following its success – the Hopper [AI chip] – is like abandoning Apple during the debut of the iPhone 1 or 2." Since the iPhone 2 hit the shelves in July 2008, Apple's stock soared an astonishing 3,540%. Additionally, Reitzes hailed AI as a "one-time-only opportunity" for Nvidia.
I concur with the analyst's perspective. In an interview last month, CEO Jensen Huang spoke of an "overwhelming" demand for the Blackwell chip. He continued, "Everyone wants to have the most, and everyone wants to be the first." These comments hint at a bright future ahead for Nvidia.
Researchers at McKinsey & Company estimate the generative AI market to be worth anywhere between $2.6 trillion and $4.4 trillion over the subsequent decade. Nvidia's chips act as the foundation for this revolutionary shift.
At present, Nvidia shares trade at 36 times next year's earnings. However, the company's stellar track record provides grounds for why the stock deserves a premium.
In light of the analyst's belief, some investors might consider investing more in Nvidia shares, aiming for potential gains given the upgraded price target. Furthermore, the finance industry often sees a premium assigned to companies with a stellar track record like Nvidia.
