Nvidia stock price forecast: Bank of America sees another 17% upside

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on Feb 14, 2023
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  • Bank of America analyst reiterates his buy rating on Nvidia Corporation.
  • Vivek Arya says NVDA will benefit from the developing momentum in AI.
  • Nvidia stock has already gained more than 50% since the start of 2023.

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Shareholders of Nvidia Corporation (NASDAQ: NVDA) have a big fat smile on their faces so far this year – and a Bank of America analyst says that smile will only get brighter moving forward.

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Nvidia stock will benefit from the AI mania

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On Tuesday, Vivek Arya raised his price target on the semiconductor behemoth to $255, which represents about a 17% upside on its previous close.

The analyst recommends buying Nvidia stock primarily because he expects it to greatly benefit from the recent quickly developing momentum in artificial intelligence.

Nvidia’s full-stack of accelerated silicon/systems/software/developers positions it uniquely to lead the nascent generative artificial intelligence arms-race among global cloud and enterprise customers.

Arya does expect volatility in the near-term following a massive year-to-date rally but is convinced that the pullback, if it realizes, won’t last long.    

Nvidia Corporation could grow at a 34% CAGR

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Nvidia Corporation is scheduled to report its Q4 results next week. Consensus is for it to earn 48 cents a share this quarter – down significantly from $1.14 a share last year.

Still, Vivek Arya is convinced that the company will see a boost to the total addressable market (TAM) of its accelerator business over the next five years to $62 billion on the back of generative AI.

We have constructed a new model that predicts Nvidia’s sales/pf-EPS could grow at a 25% to 34% CAGR to >$14/sh by CY27E as adoption of generative AI quadruples the addressable oppty for AI accelerators.

Nvidia stock is currently up more than 50% versus the start of the year.  

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