Nvidia (NVDA) stock forecast and price target prediction

Key points

• Nvidia holds a strong position in the graphics processing unit market.
• The company focuses on data centers and artificial intelligence.
• NVDA is now the largest company by market cap, surpassing Microsoft.

Nvidia is the leading player in graphics processing units. It develops and supplies GPUs for gaming and multimedia applications. As its products have expanded to artificial intelligence, the company’s stock price has grown in tandem. Today, NVDA is one of the hottest tech stocks out of Silicon Valley.

NVDA stock price

Nvidia stock has risen dramatically over the past five years, driven by data center and AI investments. Though it has ebbed and flowed in that time, the company has had a consistently strong financial performance.

NVDA’s price has surged in 2024. It traded for under $500 at the beginning of the year and smashed the $1,000 level in early June — just before the anticipated stock split.

The company noted this steep rise in the stock price. Its June split is an attempt to make its stock more affordable for employees and investors.

Just five years ago, NVDA traded for under $50. As of June 18, Nvidia took down Microsoft’s lead for the company with the top market cap. The toppling happened mere days after the NVDA stock split – which makes stock prices more accessible to retail investors.

What is Nvidia’s price target? 

As expected, analysts are generally bullish on the stock.

According to analyst estimates, NVDA’s 12-month average price target is $123.63. Among 61 stock analysts, 46 have a “buy” rating for the leading chipmaker.

How has the Nvidia stock price performed?

NVDA has performed remarkably well, and its long-term returns are even more impressive. Over the past three years ending June 17, NVDA has given its investors a 600% return.

This isn’t to say the stock hasn’t seen decreases. For example, it went from over $300 to barely over $100 between 2021 and 2022. In 2024, it fell from $950 in March to $762 in April.

But even the latest slump is in the rearview mirror, as the stock surged to new highs in June. NVDA has performed exceptionally well, rewarding investors who’ve held on to it.

Nvidia earnings

Nvidia handily beat revenue and earnings growth projections in early 2024. Revenue for the first quarter of fiscal 2025 was $26 billion, compared to a projected $24 billion. Projections said revenue would be plus or minus 2% of that amount. But it beat the forecast by nearly 6%.

The Big Tech company attributes its strong financial performance to data centers and AI growth.

“The next industrial revolution has begun — companies and countries are partnering with Nvidia to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center — AI factories — to produce a new commodity: artificial intelligence,” Jensen Huang, founder and CEO of Nvidia, said in a statement.

Nvidia at a glance

Nvidia was founded on April 5, 1993, by Huang, Chris Malachowsky and Curtis Priem. At the time, they aimed to develop 3D graphics for the gaming and multimedia markets. In 1999, the company released the GeForce 256, marketed as the “world’s first graphics processing unit.”

The company received $20 million in funding the year it began. It saw success with the GeForce 256 and other chip products. Nvidia then received a $200 million advance to develop hardware for Microsoft’s Xbox.

Over the next several years, Nvidia established a dominant position in the GPU market. In 2006, it released the CUDA platform, using GPUs to speed up computer applications. This innovation put the company on a path toward future advances in AI technology.

GPUs were originally intended for gaming. But they’re now useful for powering AI. This has helped Nvidia become a major player in the latest tech trends.

Nvidia controversies

The AI company has faced a few controversies. For example, it has been accused of acting as a “GPU cartel,” using its power to control supply. Executives from competitors Groq and AMD have alleged that Nvidia delays shipments of GPU orders if companies consider using rival chipmakers. Nvidia has not officially responded to the allegations.

Another controversy occurred when Nvidia attempted to buy Arm from SoftBank Group. This would have been the largest semiconductor chip merger. But the deal was terminated in 2022 amid litigation with the Federal Trade Commission. According to the FTC, the acquisition would have harmed market competition.

Nvidia IPO

Nvidia went public on Jan. 22, 1999, at $12 per share. It offered 3.5 million shares at that price, raising $42 million.

Shares surged during the first trading day, reaching $21. Given this sharp rise, the IPO was a success.

By the end of March 1999, NVDA sold at a split-adjusted 44 cents, similar to its first trading day. By December 1999, it traded for nearly $1 split-adjusted. By mid-2000, it traded for over $2.50.

Nvidia stock splits

Nvidia stock split 2024

In May 2024, the chipmaker announced its plans for a 10-for-1 stock split. Each share price from market close on June 7, 2024, is effectively worth a tenth of the price on June 10. But shareholders will now hold 10 shares instead of one. It’s important to note that stock splits don’t change a company’s market valuation.

NVDA has held five other stock splits since its IPO in 1999. The previous stock split, a 4-for-1 split, took effect on July 20, 2021. With that type of split, the share price is divided by four. So shareholders saw their number of shares quadruple.

Nvidia stock split history

Opportunities and obstacles facing Nvidia

Some of Nvidia’s most significant opportunities are in AI, machine learning and data centers. The company’s GPUs are essential parts of AI and machine learning applications. These trends don’t seem to be going away anytime soon. Demand for the company’s GPUs could increase as more companies integrate AI and machine learning into their products and services.

Cloud computing is another developing trend. This technology requires using data centers, an area in which Nvidia invests. Nvidia’s GPUs and the networking technologies it acquired with Mellanox can help the company take advantage of data center growth.

Obstacles include regulatory scrutiny and supply crunches. As mentioned, Nvidia wanted to acquire Arm but reversed course amid litigation with the FTC. As the company grows, it could face more scrutiny.

GPU supply is also a problem, as the company has faced shortages. Historically, Nvidia developed and supplied GPUs for the gaming and multimedia markets. Today, its products have much broader applications. If Nvidia doesn’t keep up with rising global demand, its revenue growth could suffer.

Strengths 

• Nvidia is a market leader in GPU technology.
• Revenue comes from data centers, professional visualization and automotive.
• The company has made several acquisitions, strengthening its business.

Weaknesses

• Regulatory scrutiny.
• Supply constraints.
• The semiconductor industry can be cyclical, leading to volatility in revenue and profit.

Nasdaq: Nvidia comparison

NVDA is one of the top stocks in the Nasdaq composite index, with a weight of 8.51% as of March 28, 2024.

The table below orders the 10 stocks with the greatest weighting in the Nasdaq by market cap. It’s reordered daily at market close.

Nvidia stock forecast 2024

Analysts are optimistic about NVDA’s future. They forecast earnings per share of $2.71 for the fiscal year ending January 2025 and an EPS projection of $3.60 the following year. Morningstar projects $111 billion in data center revenue for fiscal 2025. That’s nearly double the company’s fiscal 2024 revenue of $60.9 billion.

Nvidia stock forecast 2025

Nvidia's revenue projection for the fiscal year ending January 2026 is less dramatic than the previous year.

That said, NVDA’s price has maintained colossal growth and is already up roughly 165% in 2024, as of June 17. Morningstar analysts believe 2025 will be another strong year as the company’s new Blackwell GPUs hit the market.

But the stock’s rise at its current pace isn’t guaranteed. Regulatory scrutiny, supply concerns and other issues could hinder Nvidia and, in turn, its stock price.

What can we expect in the coming years?

Nvidia will likely continue to grow positively if it maintains a strong position in the AI and data center segments. Its GPUs may also see more robust demand as these technologies become more integral to the economy. But Nvidia must be able to keep up with it.

The company continues expanding into new segments, including autonomous vehicles, edge computing and the metaverse. It also continues investing heavily in research and development, which may lead to more innovation.

But Nvidia may grapple with more regulatory scrutiny. Investors should continue to monitor the company’s financial health. Keep an eye on revenue growth, profitability and cash flow. If Nvidia can maintain its strong financial performance, it can boost investor confidence. This could help it overcome uncertainties and obstacles.

Frequently asked questions (FAQs)

Is Nvidia stock a good buy?

The average price target among the Wall Street analysts covering Nvidia stock is $123.63, as of June 17. Of the 61 analysts covering NVDA, 46 have a “buy” rating.

What is the highest Nvidia stock has ever been?

As of the time of this writing, NVDA reached a split-adjusted, all-time intraday high of $136.33 on June 17. 

When did Nvidia stock split?

Nvidia has had several stock splits: June 2000 (2-for-1), September 2001 (2-for-1), April 2006 (2-for-1), September 2007 (3-for-2), July 2021 (4-for-1) and June 2024 (10-for-1).

Does Nvidia stock pay dividends?

Nvidia first paid dividends in 2013 and still pays a quarterly dividend today. However, it cut its dividend from 16 cents to 4 cents per share in 2021. The company increased its dividend to 10 cents per share in June 2024. But that declined to 1 cent per share after the June stock split.