- Nvidia (NVDA) will face headwinds, no doubt, but the company remains a tech-market leader and innovator.
- Two Wall Street experts are preparing for Nvidia stock to move higher.
- Investors should buy some Nvidia shares on the dip.
Graphics chip maker Nvidia (NASDAQ:NVDA) is likely to face the same obstacles that many tech component manufacturers are dealing with in 2022. Still, NVDA stock should reward long-term investors as the company provides top-of-the-line products.
Analysts’ predictions shouldn’t be your only source of information and inspiration. But they can be useful when considering the possible future trajectory of interesting stocks.
Not long ago, two analyst provided ambitious price targets for NVDA stock. There’s no guarantee that the stock will get there, of course, but it’s worthwhile to consider their arguments.
Besides, there’s no doubt that Nvidia continues to earn its reputation as a premier provider of technology components. Despite the macro-level obstacles, Nvidia is poised to forge ahead and continue offering supreme value to the shareholders.
What’s Happening With NVDA Stock?
Troublingly, NVDA stock recently broke below the crucial $200 level. This brought Nvidia’s trailing 12-month price-to-earnings ratio down to 48, which doesn’t indicate a screaming buy, but isn’t outrageously overpriced either.
Nvidia’s forward annual dividend yield is a measly 0.09%, so investors will need the share price to increase in order to turn a noticeable profit. If there’s any catalyst that can move the needle, it’s Nvidia’s enduring commitment to top-tier technology innovation.
To get a feel for what Nvidia’s been up to lately, check out the company’s April update concerning the Studio Driver. This includes “optimizations for the most popular 3D apps, including Unreal Engine 5, Cinema4D and Chaos Vantage.” Digital artists ought to appreciate the way Nvidia’s Studio technology “accelerates creative workflows,” as the company put it.
Meanwhile, artificial intelligence (AI) enthusiasts can take a gander at Orin, a low-power system-on-chip based on the Nvidia’s Ampere architecture. Apparently, Orin exceeded AI inference expectations:
“In edge AI, a pre-production version of our NVIDIA Orin led in five of six performance tests. It ran up to 5x faster than our previous generation Jetson AGX Xavier, while delivering an average of 2x better energy efficiency.”
Nvidia Is Still Very Strong
Even with its statue as in innovator established, can Nvidia regain favor on Wall Street in 2022?
At least two experts on Wall Street seem to think so. First of all, Piper Sandler analyst Harsh Kumar reiterated a “buy” rating on NVDA stock, while also issuing a $350 price target.
Kumar is well aware of the China Covid-19 supply risk and reportedly said that it’s worth monitoring. On the other hand, the analyst assured that the risk from Russia demand is “quite manageable” given the supply constraints.
Speaking of supply concerns, Kumar contended that Nvidia is on track to hit supply/demand equilibrium in 2022’s second half. Additionally, Kumar observed Nvidia’s “steady cadence of new product launches helping to offset concerns about seasonality.”
Kumar wasn’t the only analyst to cite supply-chain issues as a headwind. New Street analyst Pierre Ferragu considers supply constraints to be a “limiting factor,” but also noted that the “secular outlook for gaming, visualization, and datacenter is still very strong, and on the datacenter front, near-term visibility is very strong as well.”
In other words, Nvidia should benefit from a favorable market for the company’s products. With all of this in mind, Ferragu gave NVDA stock a “buy” rating along with a price target of $280.
What You Can Do With NVDA Stock
$280 and $350: These are both ambitious price targets for Nvidia shares, but they’re backed up by well-considered analysis. So, what will you choose to do with these compelling bullish arguments?
If you’re ready, you might consider scaling into a position with NVDA stock. As long as Nvidia relentlessly pursues the cutting edge in tech hardware products, the stock deserves to move steadily higher.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.