Amidst a year of notable events for the prominent semiconductor company, Nvidia (NASDAQ: NVDA), Monday, June 10 stood out as a significant day as the company’s stock unexpectedly plunged by 90%. However, this drastic drop from over $1,000 to just above $100 was not a cause for concern but rather a result of a 10-for-one stock split that Nvidia had announced in May.
While the impact of the split may be less significant in an era where fractional stock ownership is common, it still provided a boost to Nvidia’s momentum. Analysts have maintained a positive outlook on the blue-chip chipmaker, with some experts, like those at Evercore, suggesting that it presents a ‘generational opportunity’ and could potentially make up 10-15% of the S&P 500.
Louis Navallier has also shared a bullish perspective, predicting that Nvidia could reach a market cap of $5 trillion in the near future, potentially surpassing 10% of the S&P 500. Despite differing opinions on whether Nvidia will exceed one-tenth of the benchmark index, analysts are optimistic about its future prospects.
According to TipRanks, a stock analysis platform, the consensus on Nvidia’s stock is a ‘strong buy’, with 37 out of 40 experts rating it as a ‘buy’. There are no ‘sell’ ratings, with the remaining analysts being neutral. However, there is some uncertainty regarding Nvidia’s ability to maintain its growth pace, which saw the company gain about $2.5 trillion in value in 20 months, as reflected in the cautious price targets.
The 12-month price target for Nvidia currently sits just 1.49% above the current price of $120.60 at $122.69. Despite recent reductions in price targets by analysts such as Barclays and Cantor Fitzgerald, these forecasts still remain close to the street high set by Bank of America at $150 after adjusting for the split.
Overall, while there may be some hesitancy regarding Nvidia’s future growth trajectory, the general sentiment remains positive for the semiconductor giant’s stock.
