NVIDIA Stock Gains Ground As Market Remains Focused On Growth Story

Shares of NVIDIA have recently tested a new all-time high level at $818.24 as the stock continued to move higher amid optimism about the company’s future performance in the world that is hungry for chips.

Analysts estimates for NVIDIA keep moving higher which is bullish for stock. Currently, NVIDIA is expected to report a profit of $15.83 per share this year. In the next year, the company’s profit is projected to increase to $17.25 per share as demand for NVIDIA’s products continues to grow.

The stock is trading at roughly 47 forward P/E, but the market ignores valuation concerns as it remains focused on NVIDIA’s growth prospects.

Analyst raise their price targets together with their earnings estimates so the stock is boosted by multiple upgrades. Analysts from BMO have even issued a price target of $1,000 per share.

What’s Next For NVIDIA Stock?

NVIDIA shares are up by more than 50% year-to-date, and the stock has significantly outperformed S&P 500. The company’s market capitalization has recently exceeded $500 billion, and it looks that mega cap stocks continue to attract investors’ interest regardless of valuation levels.

Traders remain focused on the rapid digitalization of the world which was triggered by the pandemic and are ready to look beyond the next few years, so near-term earnings estimates do not have a major impact on NVIDIA’s share price performance.

The key question for traders right now is whether the trade is getting crowded as other crowded trades in the tech space like Tesla had some trouble this year when some traders decided to take profits after the major rally.

However, it remains to be seen whether the stock is ready for a pullback as analyst price targets keep moving higher while the company’s valuation has not reached extraordinary levels.

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This article was originally posted on FX Empire


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