Is Nvidia a good growth stock?
Since Nvidia's P/E ratio is nearly 74, the company would need to generate annual EPS growth of roughly 74% over the next five years to be undervalued today. Some investors could believe this lofty growth rate is quite possible. After all, Nvidia's EPS skyrocketed 629% year over year in the first quarter of 2024.
The GPU giant could keep growing at a remarkable pace. The past five years have been stunning for Nvidia (NVDA -1.72%) shareholders as the company's market cap has soared by a phenomenal 2,900%, turning an investment of just $100 in the stock half a decade ago into just over $3,000 as of this writing.
Prediction: Nvidia's Stock Correction Will Lead to Outsized Gains in the Second Half of 2024.
Of the 36 analysts surveyed by LSEG in June, 21 rated Nvidia as a buy or a strong buy. Many on Wall Street seem to view the stock as undervalued.
Nvidia stock still boasts a best-possible score of 99 on its Composite Rating and EPS Rating and a nearly ideal Relative Strength Rating of 98. Nvidia also is one of the Magnificent Seven stocks that led the 2023 stock rally.
Consensus estimates predict Nvidia's earnings will increase at an annual rate of just over 35% for the next five years. Based on the company's fiscal 2024 earnings of $12.96 per share, its bottom line could jump to $58.11 per share after five years, assuming it does increase at the predicted rate.
Hence, based on current estimates, the chances of Nvidia's share price crossing $1,000 in the next decade appear slim. These projections, however, can change in case Nvidia makes even more dramatic advances in AI technologies in the coming years. Manali Pradhan has no position in any of the stocks mentioned.
Nvidia's (NVDA. O) , opens new tab rallied to record highs on Wednesday, with the artificial intelligence chipmaker's valuation breaching the $3 trillion mark and overtaking Apple (AAPL. O) , opens new tab to become the world's second most valuable company.
Nvidia's consensus long-term growth rate is 43% a year, which is among the highest for S&P 500 companies and multiples that of Microsoft and Apple. At that rate, Nvidia's operating earnings per share should climb to $80 in four years from $19 today, resulting in a long-term price/earnings ratio, let's call it, of 18.
10-years: A $1,000 investment in Nvidia 10 years ago has compounded at 74.5 percent annually and would be worth $261,490.87 today.
Could Nvidia top $1000 a share in 2026?
How Nvidia's Post-Split Stock Could Rise Tenfold. In the year since Nvidia's boffo Q1 FY 2024 report released in May 2023, the company's stock has risen 248%. Nvidia stock — after splitting 10-for-1 early in June — could rise from $100 to $1,000 by 2026.
Nvidia stock has 258% upside as its 'impenetrable moat' will propel it to a $10 trillion valuation by 2030, tech analyst says. Nvidia will be worth $10 trillion by 2030 as its next-generation Blackwell GPU drives massive revenue gains.
Nvidia (NVDA)
In that same vein, Nvidia (NASDAQ:NVDA) is one of the best stocks to buy now. As the preeminent AI chipmaker, it will be the behind-the-scenes powerbroker for data centers and hyperscalers like Microsoft. Its ownership of the graphics processing unit (GPU) market can't be understated.
However, Nvidia always eventually bounced back after a major decline. Given enough time, the stock has a 100% rebound rate historically.
Nvidia stock is losing ground in conjunction with recent earnings reports from two of the world's biggest and most influential companies. Alphabet and Tesla each issued second-quarter results and guidance yesterday, and the reports kicked off a substantial pullback across the stock market.
Based on its fiscal 2024 earnings of $1.21 per share, Nvidia's bottom line could jump to $7.24 per share after five years. Multiplying the projected earnings after five years with the Nasdaq-100's forward earnings multiple of 29 (using the index as a proxy for tech stocks) points toward a stock price of $210.
There's an easy answer to this question: It's absolutely not too late to buy Nvidia stock.
| Name | Total ESG Risk score | G |
|---|---|---|
| TSMWF TAIWAN SEMICONDUCTOR MANUFACTUR | 15 | 6 |
| IFNNF INFINEON TECHNOLOGIES AG | 15 | 4 |
| NVDA NVIDIA Corporation | 14 | 6 |
| TOELF Tokyo Electron Ltd. | 14 | 5 |
Financial Strength
Nvidia is in outstanding financial health. As of April 2024, the company held $31.4 billion in cash and investments, as compared with $9.7 billion in short-term and long-term debt. Semiconductor firms tend to hold large cash balances to help them navigate the cycles of the chip industry.
The bottom line is that Nvidia might be overvalued right now, but trying to time selling at a short-term peak is a fool's errand. Its prospects warrant holding the stock for the long term with a long runway for its AI products as well as its other segments like technology for self-driving vehicles.
Is Nvidia a bubble?
Nvidia Is Not In A Bubble But It Is Not Without Risk.
An investment of $5,000 made in shares of Nvidia 10 years ago would now be worth more than $1.2 million. A big chunk of those gains have arrived since the beginning of 2023 once the company's business took off remarkably thanks to the red-hot demand for its artificial intelligence (AI)-focused graphics cards.
The findings of our fundamental analysis indicate that Nvidia is currently fairly valued. P/E ratios of 30x and 25x for 2026 and 2027 are justifiable for a company of this level of quality. Even more so, as chances are that earnings will continue to surprise on the upside.
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| ServiceNow (NOW) | 1.49 | Strong Buy |
| Assurant (AIZ) | 1.50 | Strong Buy |
| Howmet Aerospace (HWM) | 1.50 | Strong Buy |
| Insulet (PODD) | 1.50 | Strong Buy |
AI frenzy makes Nvidia the world's most valuable company. Chip-maker Nvidia became the world's most valuable company after its share price climbed to an all-time high on Tuesday.
