Nvidia is the hottest AI company in the world. Will its incredible success story continue?
No stock in the field of artificial intelligence (AI) is hotter and more influential than NVIDIA (NVDA -2.25%) right now. The company’s share price is up 155% in 2024 trading and the company continues to have an outsized influence on valuation trends in the AI space and the market as a whole.
In a note released last Friday, Evercore ISI maintained its buy rating on Nvidia shares and raised its price target to $150 per share from $145 per share. Based on the stock price of about $127 per share as of this writing, the new price target suggests a potential upside of about 18%. Should investors follow the firm’s advice and buy Nvidia shares now?
Nvidia’s growth prospects remain very promising
Due to strong demand from hyperscale cloud customers, including Microsoft And Meta-platformsEvercore believes Nvidia will continue to deliver strong performance. The company’s graphics processing units (GPUs) have become the foundational hardware for advanced AI training and inference applications, and the firm’s analysts expect the AI hardware leader to continue to benefit from demand trends in the second half of the year.
While some investors and analysts have wondered whether demand for AI-related hardware could stagnate or even decline in the not-too-distant future, there are signs that Nvidia is well on its way to proving the doubters wrong. In addition to strong demand from hyperscalers, the company should also see an increase in purchases from government customers in the early stages. The company also has some positive catalysts on the horizon at the hardware level.
With the upcoming launch of the next Blackwell processors, Nvidia is about to introduce a major new revenue driver. The first Blackwell processors are expected to offer significant performance and power consumption improvements compared to the H200 processors, which are currently best in class for AI and other accelerated computing applications.
Nvidia stock could experience some volatile swings related to earnings announcements, geopolitical developments, and general macroeconomic trends, but for long-term investors, the stock still appears to be a worthwhile investment.
Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Keith Noonan does not own any of the stocks mentioned. The Motley Fool owns and recommends Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
