Mizuho raises NVIDIA’s price target to $1,275: Can it reach there?

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on Jun 4, 2024
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  • Mizuho raises NVIDIA's price target to $1,275.
  • Analysts confident in AI-driven growth, despite valuation concerns.
  • Key technical levels: $950 pre-split, $95 post-split.

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On Tuesday, Mizuho Securities made headlines by raising its price target on NVIDIA Corp (NASDAQ: NVDA) to $1,275 from the previous target of $1,180 while reiterating its ‘Buy’ rating on the semiconductor giant. The boost in the price target reflects Mizuho’s confidence in NVIDIA’s continued growth, particularly in light of its upcoming Blackwell GPU platform and the 10-for-1 stock split scheduled for June 7.

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Analysts’ optimism and valuation concerns

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NVIDIA’s stock performance has been a focal point for investors, with strong artificial intelligence (AI) opportunities driving its value. Mizuho analyst Vijay Rakesh emphasized the expected success of the Blackwell B100 GPU, which is anticipated to launch between the third and first quarters of this year. Additionally, the launch of the B200 NVL36/72 full rack is projected to significantly impact earnings, further bolstering NVIDIA’s financial outlook.

The company’s AI-driven products, including the Hopper platform, continue to showcase NVIDIA’s leading position in the tech industry. The demand for NVIDIA’s advanced GPUs, such as the H100 and the upcoming Blackwell, underscores the firm’s critical role in AI and machine learning advancements. This robust demand is a key factor in the bullish sentiment surrounding NVIDIA’s stock.

NVIDIA is navigating a competitive landscape with players like AMD and Intel. Recently, Intel unveiled new processors aimed at regaining market share, intensifying the rivalry.

However, NVIDIA’s substantial investments in research and development and its established presence in the AI sector position it favorably against its competitors. Goldman Sachs reinforced this view by reiterating its Conviction Buy rating recently, highlighting NVIDIA’s dominance in accelerated computing.

Despite NVIDIA’s impressive performance, some analysts caution against potential overvaluation. The company’s high valuation multiples and insider selling have raised concerns. Nonetheless, NVIDIA’s recent earnings have consistently exceeded expectations, demonstrating strong revenue and profitability growth.

In addition to its financial performance, NVIDIA’s strategic partnerships and ongoing certification processes for AI memory chips from Samsung and Micron Technology reflect its commitment to innovation and maintaining technological superiority. CEO Jensen Huang’s recent statements about the progress and challenges in certifying these chips further illustrate NVIDIA’s dedication to advancing AI capabilities.

Upcoming stock split

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With the upcoming stock split, NVIDIA aims to make its shares more accessible to retail investors, potentially driving further demand and stock price appreciation.

Now, let’s see what the charts have to say about the stock’s price trajectory. This technical analysis will delve into the recent trends, support and resistance levels, and potential future movements for NVIDIA’s stock, providing a comprehensive view for investors considering their next steps.

Potential for retracement or sideway trading

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NVIDIA’s stock has experienced a strong bull run since 2023, which has accelerated following the company’s Q1 earnings release recently. However, the Relative Strength Index (RSI) indicates that the stock is currently in the overbought zone. This suggests that the stock may either retrace or trade sideways for a while.

NVDA chart by TradingView
For investors looking to buy, the optimal strategy is to wait for a potential price drop or until the stock goes through a consolidation. Current shareholders can continue holding the stock as long as it doesn’t close the Q1 earnings gap and falls below $950. After the stock split, this critical level will be $95.

Bearish investors should be cautious about shorting the stock ahead of the split, as increased retail participation might drive the price higher. The stock’s medium-term momentum will likely remain strong as long as it trades above its 50-day moving average.

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