Nvidia's Shares Recommended as Top Choice for November by One Analyst on Wall Street
Nvidia (NVDA) has been experiencing an upward surge, and one financial expert sees numerous reasons behind this trend. Mizuho's Vijay Rakesh recently declared Nvidia as his top choice for November in the semiconductor sector.
As per the analyst's note, Nvidia's commanding position in providing chips to the increasing number of corporations innovating in artificial intelligence (AI) is expected to strengthen further. Given the rapid expansion of this market, Nvidia stands to profit significantly, which justifies the analyst's positive assessment of Nvidia's stocks.
Nvidia's stock is skyrocketing
In an unexpected turn of events, Mizuho still retains a $140 price prediction for Nvidia stocks. After the stock has surged more than 10% to new heights within the last week, and 18% within the past month, it has already surpassed the stipulated level. The rapidly evolving AI chip market might prompt the analyst to revise this price forecast.
Rakesh anticipates that Nvidia holds more than a 95% market share in a market predicted to grow at a staggering 74% annual growth rate for the coming years. In his research for Barron's, he wrote: "We expect the penetration of AI servers to exceed 10% by 2027, rising from roughly 1% in 2023, and Nvidia to maintain its dominance with effective strategic execution."
However, Nvidia's growth isn't limited to chips for AI training and inference. The analyst also perceives opportunities for Nvidia beyond chips for AI data center servers. Nvidia's gaming segment contributes significantly to its revenue. Sales of gaming chips have also seen a notable increase recently, growing by more than 11% over the past two quarterly periods. Rakesh estimates that Nvidia holds approximately 75% market share in the gaming GPU (graphic processing unit) market.
Despite Nvidia shares surpassing their current Mizuho price limit, this tech giant holds a commanding position in various expanding sectors. Investors should brace themselves for volatility, but Nvidia's stock still appears to be a promising long-term investment from its recent levels.
The anticipated growth of the AI chip market, projected at a 74% annual rate, could potentially lead to a revised price forecast for Nvidia stocks by the analyst. With Nvidia expected to maintain its dominance in this market, their gaming segment also seeing a rise in GPU sales, investing in Nvidia might continue to be a promising long-term strategy for many, despite the market volatility.
