It’s impossible to ignore the effect that AI has had on the entire technology landscape over the past year, and Nvidia (NASDAQ: NVDA) has been the star of the AI boom. The company’s cutting-edge chips are at the heart of the AI revolution, providing the computational horsepower that makes it all possible. As a result, NVDA stock is up more than 200% year to date, and these gains led to the company’s recent 10-for-1 stock split.
They also led to many Wall Street analysts reevaluating Nvidia’s future prospects, and there’s a new bullish price target from one analyst that investors should pay close attention to. In fact, Rosenblatt Securities analyst Hans Mosesmann reiterated his “Buy” rating on NVDA stock recently, and increased his price target to $200 for the next 12 months. That represents potential upside for investors of 58% from where the stock is currently trading.
Nvidia’s Software Catalyst
If NVDA stock reaches Hans Mosesmann’s $200 price target, its market cap would be within striking distance of $5 trillion, and he thinks that Nvidia can achieve that thanks to one overlooked aspect of its business. According to the analyst, the real narrative lies in the software that complements all the hardware goodness. He also went on to suggest that demand for software will increase over the course of the next decade in terms of overall sales mix.
Nvidia’s competitive edge lies not only in the hardware, but also in the associated software that helps provide top performance, and there’s a huge market for this. In fact, Cathie Wood of Ark Invest estimates that the total addressable market for AI software could be worth $13 trillion by 2030. Not only that, but Nvidia will begin shipping its next-generation Blackwell GPUs later this year, which will cement the company’s lead in the AI chip space.
NVDA stock is currently trading for 51 times forward earnings, and while some might consider this expensive, it’s still an attractive price for a stock that has generated gains of more than 20,000% over the past 10 years. For this alone, we can say that NVDA stock is still a buy, and this recent pullback is the perfect opportunity to buy more shares.
Nvidia’s Upcoming Shareholders Meeting & Competition
On June 26th, Nvidia will hold its annual shareholder meeting to discuss strategy and vote on action items like board approvals. In general, annual shareholder meetings don’t move the stock as much as earnings do, but Nvidia’s upcoming one is still an important event that could help shed some light on what the future holds for the company, and the AI market as a whole.
There are many reasons why the stock still looks strong as we approach the meeting, and one of them is the fact that Nvidia’s cash flow is extremely healthy. Many analysts are telling investors to keep in mind that competitors like AMD (NASDAQ: AMD) or Intel (NASDAQ: INTC) could catch up and take market share from Nvidia, but the company has the major resources needed to protect itself through constant innovation.
In tech, having the best product goes a long way. Therefore, Nvidia’s competitors need to produce a product comparable to Nvidia’s if they want to chip away at its market share, and in order to do this, they need a lot of money.
For instance, AMD spent $1.5 billion on research and development last quarter, while Nvidia spent $2.7 billion. Keep in mind that Nvidia is already in top position, as it has the best tech on the market, and it’s still outspending AMD almost two to one. Intel, on the other hand, is outspending both, at $4.4 billion last quarter. The catch here is that this spending is putting Intel in the red, and it’s very likely that it’ll be unable to keep this up, reporting negative free cash flow.
NVDA Stock Forecast
Since Nvidia has more than enough resources to defend itself from its main competitors, we can say that Nvidia can maintain or even grow its already massive market share. There are certainly more factors, but it’s not an unreasonable assumption. According to data from Statista, the global AI market could grow at a compound annual growth rate of about 28.5% through 2030, and this is a seriously quick rate of growth, slower than the lightning speed at which the company has been growing recently.
But still, this would be an incredible growth rate to maintain. Keep in mind that this is an estimate for the entire market, not just semiconductors, which are Nvidia’s main business, so this is a very rough measuring stick. This is why Nvidia is taking many steps to become way more than a semiconductor company.
In fact, it’s expanding its revenue streams by entering new and growing industries, and attempting to build an entire AI ecosystem. It is partnering with companies like Dell (NYSE: DELL) to offer full-scale, on-premises, AI computing solutions, and it is building technologies and end-to-end platforms designed for autonomous vehicles, humanoid robotics, and drug research.
There’s more, but we’ll stop here. The point is that Nvidia intends to position itself at the very center of all things AI. Therefore, NVDA stock is still a strong buy for long-term investors, especially at this current dip, which can be considered a great opportunity that investors should consider capitalizing on before the stock skyrockets again.
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