Jeffries Raises Nvidia Price Target from $740 to $845
Our Sister Publication World Opportunity Investor Recommended 200 shares of NVIDIA Corporation (NasdaqGS: NVDA) at $599.67 on 5/21/2021 in Alert #139. Since then, the high technology company has been jumping in price, reaching a new intraday high and new 52 week $775 high of a share this afternoon or a whopping 29% rise in 28 days.
Our sister publication World Opportunity Investor recommended buying 200 shares of NVIDIA CORP (NVDA) on May 21, 2021, just 28 days ago. The company's shares have now jumped 29% since then. The rise in the company's shares can be attributed to several important catalysts in multiple areas, such as its robust revenue growth, largely solid financial position, reasonable debt levels plus an impressive record of earnings per share growth, compelling growth in net income, and expanding profit margins.
We reported the success of the trade recommendation to our Wall Street Rebel readers on June 14, 2021. We also reported that we believed NVIDA's breakout over $650 and 100% Erlanger Chart Room tech rank and a 4-for-1 stock split coming on July 20, 2021, could lock in a total move that could drive the stock to $1,000 a share (net $250 after the stock split).
Wall Street's technology analysts are extremely bullish on chipmakers, and particularly Nvidia, as businesses and individuals adjust to a hybrid work-personal life environment with surging demand for laptops, mobile devices, and cloud services and data centers.
After our recommendation, two Wall Street investment firms raised their target price on Nivida. Jefferies raised their target to $845, and Bank America analyst Vivek Arya raised his target price to $900 from $769, reiterating his buy rating on the company.
Today with the Dow Jones down over 400 points at 2:15 PM, Nividia appears to be on the verge of its third straight day up. We continue to believe that a solid break and weekly close above $800 a share in the next 30 days and 4 to 1 share split approaching that Bank Of America's $900 target will be reached late this summer, just as the worst of the Covid-19 pandemic has passed over most of the world,
In our last update, we mentioned this month's upward move in Nivida was after the company's Chief Executive Officer Jensen Huang said he remains confident that regulators will approve the company's acquisition of Arm from Japan's Softbank Group Corp. He reinforced this view when Arm CEO Simon Segars spoke at the Six-Five Summit last Thursday. BMO Capital Markets analyst Ambrish Srivastava supported this in a note to his firm's investment clients…
"If Nvidia's aim was to use a public forum to showcase what a combination with Arm would mean for the broader ecosystem, along with allaying fears about Arm losing its independence, then the company went a long way in accomplishing that by having both the CEOs jointly take questions."
Jefferies analyst Mark Lipacis expects that both Nvidia and Arm will…
"Become more visible in articulating the benefits of the deal, which we think will translate to the improved sentiment" and an expanded multiple for Nvidia."
Right now, Lipacis points out that there is some skepticism that the deal will be completed. We see this as a temporary drag on the share price of Nividia, and once the skepticism is proven unfounded, we expect the share price to enjoy a euphoric rise over $900 to our $1,000 target.
While Nvidia has over 50% this year far, it is on the second-best performer among SOX components, behind Applied Materials. The industry's benchmark index is only up approximately 14% in 2021.
We realize placing a $1,000 target on Nivida may seem very aggressive. Still, we believe Nivida is a transformative technology company that may well be on the cutting edge of computer chips, including those needed for Artificial Intelligence for several years to come, and may still be in the early stage of its earnings momentum. Keep in mind a market cap of fewer than 500 billion dollars; some analysts believe Nividia in the next few years will soar over $1 Trillion.
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