The NVIDIA share has gained significantly in the past few weeks and months. Bank of America analyst Vivek Arya is confident that the chip company will continue to benefit from the AI trend.
• NVIDIA shares soaring
• Analyst: Stock still offers “compelling valuation”
• Bank of America raised its price target
Last year, NVIDIA shares rose by almost 240 percent. This year the soaring continues: Since the start of the year, the stock has gained 33.60 percent in value and ended trading last Friday 4.97 percent higher at $661.60. At the end of the week, NVIDIA shares had climbed to a new record high of $666. The strong performance of NVIDIA shares continued in the new week: the stock gained 4.79 percent to $693.32 on the US tech stock exchange NASDAQ.
Bank of America analyst bullish on NVIDIA
A new analyst comment is likely to provide support. Bank of America believes that NVIDIA stock still offers investors a “compelling valuation” because AI demand is still in its infancy. “Enterprise adoption of GenAI has yet to gain momentum in fiscal 2025, with NVIDIA benefiting from its widespread availability in public clouds and unique partnerships with ServiceNow, SAP, VMWare, Dell, HPE and others,” Markets Insider quoted Bank of America as saying -Analyst Vivek Arya.
Arya expects NVIDIA to deliver modest revenue growth and solid profit growth when it reports its results later this month. In the longer term, the analyst assumes that NVIDIA will generate earnings per share of more than $40. “NVIDIA is one of the rare large-cap technology stocks trading at a P/E ratio of 31x/25x CY24/25, which is below its [geschätzten] EPS CAGR of 45% CY23-25. We see a path to $40 EPS in CY27E at over $160 billion accelerator TAM and much higher (perhaps 2x or $80/share) if AMD’s (probably very optimistic) 400-share TAM would reach billion-dollar levels,” said Arya.
The company’s profitability is based on its market dominance. According to Markets Insider, the analyst estimates that NVIDIA will retain a 90 percent share of the AI training market and more than 50 percent share of the AI inference market. “NVIDIA’s variety of SKUs ranges from $1,200 to over $30,000, so it won’t leave any part of the computing market uncovered,” says Arya.
Bank of America raises price target for NVIDIA shares
In keeping with Arya’s bullish stance, Bank of America raised its NVIDIA price target from $700 to $800 last week on Thursday. The US bank believes that the paper still has a potential increase of around 21 percent compared to Friday’s closing price (US$ 661.60).
At TipRanks, 38 Wall Street analysts have provided 12-month price targets for NVIDIA stock in the last three months. Of the 38 analysts, 34 recommend buying the stock, while four recommend holding the stock. The average price target is $678.26, while the highest price target is $1,100 and the lowest is $560.
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