How High Can Nvidia Stock Go? BofA says there are still plenty of runways

Topline

Nvidia shares have a lot more room to reach all-time highs, say analysts at Bank of America, who just meaningfully raised their price target on artificial intelligence poster child Nvidia due to a very favorable growth horizon.

Key facts

Big number

$4.7 trillion. That’s Nvidia’s market cap implied by Bank of America analysts’ $190 price target. That’s far higher than the market value of any publicly traded company ever, a title Apple holds for $3.6 trillion.

Important background

Nvidia is the second most valuable company in the world with a market capitalization of $3.4 trillion. That’s a far cry from the roughly $10 billion valuation it had a decade ago and the sub-$300 billion market cap it had just two years ago. Nvidia’s stock market rise followed the late 2022 release of OpenAI’s ChatGPT generative AI chatbot, which inspired significant earnings growth for the company as Nvidia’s graphics processing units are at the core of these AI applications. Nvidia’s revenue and net income were up 350% and 2,400% respectively during the quarter ending in July compared to the comparable period of 2022. Originally, Nvidia was a company known for its role in video game graphics, but it is becoming still led by founding CEO Jensen Huang, who, according to Forbes calculations, is the 11th richest person in the world thanks to his 3% stake in the company. Common valuation metrics indicate that Nvidia shares are expensive relative to their fundamentals — it has the second-highest price-to-sales ratio, which compares a company’s market capitalization to its last twelve months’ revenue, on the S&P 500, but many remain optimistic thanks to what Huang describes as “emotional” and “insane demand for Nvidia products.

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