Is Nvidia A Buy After 2023's Stratospheric Rally? Fund Manager Gary Black Thinks It's Still Cheap For 5 Reasons
Portfolio Pulse from Shanthi Rexaline
Nvidia Corp. (NVDA) has seen a significant rally in 2023, with shares increasing by 264% and reaching a new high at the 2024 Consumer Electronics Show. Fund manager Gary Black believes NVDA is still undervalued, trading at 26.5 times the adjusted EPS for 2024 with a projected 28% CAGR in EPS from 2024 to 2028. Analysts have set a 12-month price target of $662.39, suggesting a 25% upside. Nvidia's Q4 guidance anticipates revenue of $20 billion, indicating over 230% year-over-year growth, despite U.S. export bans to China. The company's AI accelerator chipsets are in high demand due to the rise of generative AI software.
January 10, 2024 | 6:29 am
News sentiment analysis
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POSITIVE IMPACT
Nvidia's stock has rallied significantly, but according to Gary Black, it remains undervalued based on future earnings growth projections. Analysts' price targets suggest further upside, and strong Q4 guidance indicates robust revenue growth.
The positive sentiment from a respected fund manager and the consensus of analysts' price targets indicate a bullish outlook for NVDA. The company's strong position in AI and expected earnings growth are key drivers for potential stock appreciation.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
The iShares Semiconductor ETF (SOXX), which includes Nvidia as one of its holdings, remained nearly flat during Nvidia's rally. However, Nvidia's strong performance and outlook could contribute positively to SOXX.
SOXX's performance is influenced by its holdings, and Nvidia's strong rally and positive outlook could have a favorable impact on the ETF, especially given Nvidia's significance in the semiconductor sector.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70