Winning is a way of life for Nvidia (NASDAQ:NVDA) not a temporary mindset. Yet, there will always be critics who might be bitter because they missed out of the Nvidia stock rally. We gave the stock an “A” grade at lower prices, hoping you benefited from the gains. There’s no reason to change our grade on Nvidia shares today.
After all, Nvidia is still an “A”-level company and a juggernaut among AI-hardware specialists. Nvidia’s move to enact a 10-for-1 share split was brilliant, and now the company’s market capitalization easily exceeds $3 trillion. So, will you choose to be in the winner’s circle, or waste your time with the bitter critics?
Nvidia’s Skeptics: Wrong Then, and Wrong Now
As we alluded to earlier, Nvidia’s skeptics will always find something to complain about. Probably the most common complaint is that Nvidia is overvalued.
That’s a fallacy because Nvidia stock is worth whatever people will pay for it; that’s Investing 101. Just as importantly, Nvidia’s high-end AI processors are worth whatever the customers will pay for them.
As long as the demand outpaces the supply, Nvidia can maintain high profits margins on its products.
It’s strange that we have to explain these things to Nvidia’s critics, but sometimes you have to revisit the basics.
Just recently, a Fortune commentator characterized Nvidia’s growth as a “problem,” writing, “By August of last year, Nvidia’s stock was substantially overvalued by most metrics. Now? The problem has nearly tripled.”
The naysayers and short sellers were wrong about Nvidia stock in August, and they’d be fools to double down now.
Do we need to remind them that Nvidia’s first-quarter fiscal 2025 revenue soared 262% year over year to $26 billion?
Should we bother to point out that the company’s adjusted earnings skyrocketed 461% YOY to $6.12 per share?
Watch for Nvidia’s Growth Drivers
Nvidia’s valuation can be justified by the company’s growth and by the intense demand for Nvidia’s H100 and Blackwell chips. Don’t be surprised if the demand intensifies when Nvidia releases its H200 processors in the coming months.
Fortunately, the sensible commentators outnumber the perma-bears. For example, Oppenheimer’s Rick Schafer listed several factors that justify Nvidia’s valuation.
These factors, which include “generative AI, DC [data center]/AI accelerators and autonomous vehicles,” drive “sustained outsize top-line growth” for Nvidia.
Consequently, Schafer isn’t too worried about Nvidia’s valuation. He recently reaffirmed his $150 price target on Nvidia stock.
In a similar vein, Barclays analyst Tom O’Malley published a $145 price target on Nvidia shares. These aren’t unrealistic at all, since the stock broke above $130 not long ago.
Could Nvidia Stock Return to Its Pre-Split Price?
Nvidia’s juggernaut status is indisputable, but a few commentators will still double down on their wrongheaded bearish thesis. Apparently, they’re willing to disregard the intense demand for Nvidia’s best-in-class products.
For more sensible investors, it’s just a question of how high the Nvidia share price might go. Could it revisit the pre-split price of $1,200 someday?
Anything is possible, but let’s not get ahead of ourselves. For now, we can focus on realistic near-term price targets like the ones proposed by Schafer and O’Malley.
With that in mind, Nvidia stock certainly deserves an “A” grade, and there’s no need to let the naysayers change your mind in 2024.
On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
