NVIDIA Corporation trading 1.39% Higher at $ 294.799 in the current trading session.

NVIDIA Stock Forecast: Momentum Summary

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NVIDIA Stock Forecast: Company Background

Nvidia Corporation is an American multinational technology company headquartered in California. It was founded on April 5, 1993 by Jensen Huang. It designs graphic processing units (GPUs) for gaming and professional computers as well as system on a chip unit (SoC) for mobile computing. Its primary GPU product “GeForce” competes with GPUs of “Radeon” brand by “Advanced Micro Devices (AMD).

In addition to GPU manufacturing, Nvidia is also engaged in application programming interface (API) called CUDA which are deployed in supercomputing sites around the world.

NVIDIA Stock Forecast: Better Than Expected Q3 Results

• On Nov 17th, Nvidia reported Q3 results and they beat most estimates. It reported revenue of $7.1 billion against the street expectation of $6.82 billion. Revenue was 50 percent higher than the same quarter a year ago.
• Diluted earnings per share stands at $1.17 per share against an estimate of $ 1.11.
• Data centre revenue was up by more than 55 percent YoY and is reported at $2.9 billion. Gaming revenue was $3.2 billion, up by 42 percent.
• Auto sales were down by more than 10 percent and stood at $135 million. The decline was expected as the industry is struggling with supply chain issues. Nvidia also sold $105 million cryptocurrency mining cards down from $266 million sequentially.
• The much talked about segment of Nvidia, its professional visualisation business, however small it is, has seen the highest growth. In the third quarter, it reported a revenue of $577 million, up by more than 140 percent in comparison of a year ago.
• Nvidia also raised the guidance for fourth quarter and expects sales to be around $7.4 billion which is well ahead of analyst estimates of $6.86 billion

Nvidia Stock Forecast: Analyst have Raised the Target Price

After Nvidia reported better than expected results, analysts issued bullish commentary on stock –

• Raymond James analyst Chris Caso affirmed strong buy on the stock with target price of $365, up significantly from his prior estimate of $225. As per Caso, supply struggles are easing, creating demand for its data centre and a positive environment is being built up from the last two quarters.
• Jefferies analyst Mark Lipacis also boosted the target share price from $260 to $370. Mark believes the earnings per share rising to $16.40 per share by 2025, and revenue from Omniverse virtual reality platform to whooping $80 billion 
• Needham analyst Rajvindra Gill has lifted the target price to all the way to $400 from $245. He weighs on booming growth in data centre business and bright prospects for global gaming market.

Nvidia Stock Forecast: Omniverse Platform and Metaverse Opportunity.

• Omniverse is Nvidia’s answer to booming opportunity of Metaverse- a virtual world to allow people engage and communicate with one another using augmented reality, virtual reality and artificial intelligence.
• Omniverse is like a replication engine for training robots, augmenting real world data and simulating the real world functionaries. One of the features of metaverse is using avatars that will replicate yourself in front of others and Nvidia is offering Omniverse avatars for this.
• During the earnings call, Huang claimed annual license fee of $1000 per user to use Omniverse. There is expected to be around 40 million designers around the world, that will sour the revenue from Omniverse to around $40 billion in coming years.
• The $40 billion figure excludes the sales of GPUs users will have to buy for their PCs to run Omniverse, which can run on any device by using Nvidia RTX graphics technology. That will boost the core business of GPU for Nvidia further.

All this explains how big opportunity is on the doors of Nvidia and it cannot be overlooked as a growth catalyst in near future.

Nvidia Stock Forecast: Should you buy now?

Nvidia is firing all cylinders and taking all positive steps to outperform on its expectations. Nvidia is a classic example of a growth stock, and nobody can deny the future growth prospects of virtual reality, augmented reality and artificial intelligence.

However, NVDA shares are currently trading at more than 80x forward earnings and therefore could be volatile in the short run. However, the stock is a good bet in the long run.

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