Here’s why Nvidia stock could double by 2024

By | December 24, 2023

man with specifications looking at a line chart on a laptop

man with specifications looking at a line chart on a laptop

Nvidia (NASDAQ: NVDA) has been a domestic investment in 2023. The semiconductor giant’s shares have more than tripled this year, gaining as much as 238% thanks to an astronomical acceleration in the company’s sales and profits. The growing demand for graphics cards plays an important role in training artificial intelligence (AI) models.

The good news is that analysts expect Nvidia stock to rise in 2024. According to 46 analysts covering the stock, Nvidia has an average 12-month price target of $650. That points toward a 35% jump from current levels. The Street-high price target is $1,100, indicating a 123% jump in the coming year.

Let’s see if Nvidia can surpass the stock’s average price target and double from current levels around $480 by 2024.

Nvidia is expected to achieve another year of stellar growth in 2024

Nvidia’s revenue is nearly $39 billion in the first nine months of fiscal 2024. Its expectation of $20 billion in revenue in the current quarter means it will end the fiscal year (which ends next month) with revenue of $59 billion . That would be a 118% jump over Nvidia’s fiscal 2023 revenue.

However, consensus estimates indicate that Nvidia could end the year with $54 billion in revenue. Analysts expect the company to generate revenues of $18.4 billion in the current quarter, which is well below expectations. Chances are Nvidia can easily crush Wall Street expectations as its AI graphics cards are selling like hotcakes.

According to Omdia, the company reportedly sold half a million units of its popular A100 and H100 data center GPUs (graphics processing units) in the previous quarter, and it is expected to exceed this figure in the current quarter. So Nvidia shares could get a nice boost from better-than-expected revenue growth in February next year, when the results for the fourth quarter of the 2024 financial year are announced.

More importantly, Nvidia is preparing itself to maintain its impressive growth momentum through 2024 by focusing on expanding its manufacturing capacity and encouraging its foundry partner to produce more chips. Nvidia, for example, is considering partnerships with Vietnam and Malaysia to produce more chips. At the same time foundry partner Taiwanese semiconductor manufacturingPopularly known as TSMC, it is reportedly set to open a new manufacturing plant in Japan in February 2024 and plans to add two more plants.

Additionally, TSMC is already working to expand its advanced chip packaging capacity in an effort to make more AI chips. Based on this, Tianfeng Securities analyst Ming-Chi Kuo expects a massive 150% increase in Nvidia’s AI graphics card shipments by 2024. The launch of two new AI GPUs in the form of the H200 and next-generation Blackwell B100 cards, as well as the large backlog of Nvidia’s current graphics cards could play a major role in driving such solid growth in shipments.

Nvidia’s data center business generated $29 billion in revenue in the first three quarters of fiscal 2024, accounting for nearly three-quarters of its revenue. The company’s $20 billion revenue estimate for the current quarter indicates it could generate $15 billion in revenue from this segment in the fourth quarter and end the year with data center revenue of $44 billion.

Assuming the 150% increase in data center GPU shipments next year translates into an identical increase in revenue, the company could generate as much as $110 billion in revenue from this segment alone. That would be significantly higher than analysts’ expectations of $85 billion in Nvidia revenue in fiscal 2025 (which coincides with the eleven months of calendar 2024).

Why Nvidia Stock Looks to Double by 2024

We’ve seen that Nvidia could outperform Wall Street growth expectations next year, which could help the stock post eye-popping gains again. According to consensus estimates, Nvidia’s earnings could rise 60% to $19.72 per share in fiscal 2025. That seems like a conservative view, considering Nvidia is on track to nearly quadruple its bottom line in the current fiscal year.

NVDA EPS estimates for next fiscal yearNVDA EPS estimates for next fiscal year

NVDA EPS estimates for next fiscal year

But even if Nvidia’s earnings growth slows to a respectable 60% and indeed reaches $19.72 per share, Nvidia’s stock price could top $1,000 based on the company’s expected earnings of 55. So there’s a chance that this AI stock will indeed come to market. -high price target due to further acceleration in the data center sector and emerging catalysts in the personal computer sector.

As such, investors would do well to continue holding Nvidia stock in their portfolios as there is a possibility it could double next year.

Should You Invest $1,000 in Nvidia Now?

Consider the following before buying shares in Nvidia:

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

Here’s Why Nvidia Stock Could Double by 2024, originally published by The Motley Fool

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