Beth Kindig, chief technology analyst at I/O Fund, believes that NVDA's market value still has a lot of room to expand, and she expects NVDA's long-term valuation to reach $10 trillion.
Kindig said that means big earnings for the $2.9 trillion AI giant, driven by strong expected growth and gains from its next-generation AI chip, Blackwell.
Investors on Wall Street are increasingly concerned that Nvidia's valuation is too high, given its sharp rise in stock prices over the past year and investors' huge expectations for its earnings growth. Last Thursday, Nvidia's stock price fell more than 6% after the earnings report was released, as the third-quarter performance guidance failed to satisfy investors.
Investors also expressed concerns about delays in shipments of Nvidia's Blackwell chip, which industry analysts reported would be delayed by two to three months due to "significant issues in reaching high production volumes."
Kindig believes that Nvidia's performance is still "good enough" to allay investor concerns.
Nvidia CEO Jensen Huang recently defended the progress of the Blackwell chip in an interview with Bloomberg, revealing that the company has made "massive changes to improve production" and hopes to generate "billions of dollars" in revenue from the next generation of chips.
“That’s why the numbers have been revised upwards and never downwards,” Kindig said of Nvidia’s assessment, adding that she remains optimistic about the upcoming Blackwell product release.
Kindig predicts that Nvidia's growth trajectory will become more apparent once Wall Street analysts raise their fiscal expectations for the next fiscal year, which should be a "big moment" for Nvidia, followed by Blackwell shipment data in 2025.
“I would say this is going to be a fireworks show,” Kindig said. “The final fireworks for Blackwell will be in the first quarter of next year with the second quarter guidance. Nvidia will have another big fireworks show early next year as we head toward $10 trillion.”
While Wall Street remains generally optimistic about the chipmaker, Kindig is the most bullish. The average analyst price target is $151 per share, which implies a 27% upside over the next 12 months, according to Nasdaq.
Article forwarded from: Jinshi Data