By now, it’s evident that the market’s enthusiasm about Nvidia (NASDAQ:NVDA) isn’t just hype or a fad. We expect the demand for Nvidia’s artificial intelligence enabled processors to remain strong in the coming quarters. That’s why the company and the stock have staying power, and we’re giving Nvidia stock an “A” grade.
The Nvidia bears and sideline-sitters have been wrong all along. Sure, Nvidia stock recently took a breather and moved sideways for a while. However, Nvidia’s upcoming launch of ultrapowerful AI processors should get the market enthused and in a buying mood. The question is: will you be invested, or will you miss out on the opportunity?
Don’t Worry About Nvidia’s Next AI Chip Generation
Nvidia will replace its currently in use H100 processors with the new chip model, known as Blackwell. Apparently, the Blackwell processors will be four times as powerful as the H100 processors.
How could this possibly be a bad thing? Well, the perma-bears and worry warts will always come up with reasons to panic. They’re concerned that customers will stop spending money on AI chips because they’ll wait for the release of the Blackwell processors.
Clearly, the bears will engage in strenuous mental gymnastics just to come up with a reason to sell Nvidia stock. Raymond James analysts aren’t worried at all about Nvidia’s upcoming AI chip generation.
In fact, analyst Srini Pajjuri reaffirmed Raymond James’s “buy” rating on Nvidia shares. Pajjuri hiked his price target on the stock from $850 to $1,100.
Concerned About Nvidia Are ‘Unwarranted’
Pajjuri’s main point is that there’s still robust demand for Nvidia’s AI chips. Concerns about “a potential pause in customer spending ahead of Blackwell ramps … are unwarranted,” Pajjuri wrote.
Moreover, Pajjuri sees the evolution of AI processors as a growth driver for Nvidia, not as an issue to worry about. Thus, the Raymond James analyst expects Nvidia’s “revenue momentum to sustain well into 2025″ based on “compelling [total cost ownership] benefits of Blackwell, exponential growth in AI model complexity, and intense competition among hyperscalers.”
Selling Nvidia stock doesn’t make sense since they are releasing a better product. Maybe, the bears would have a persuasive argument if there were signs of a slowdown in AI chip demand, but that’s not the case. So, for the foreseeable future, the short sellers will almost certainly be on the wrong side of the trade.
Nvidia Stock: $1,100 Is a Reasonable Target
Let’s be perfectly honest. Some of the Nvidia perma-bears are probably just hoping for a pullback because they feel like they “missed out” on the share-price rally.
They don’t have to “miss out” on the next leg of the rally. Demand for AI enabled chips is strong, and Nvidia’s next generation of processors will be ultrapowerful.
Consequently, we’re assigning Nvidia stock an “A” grade. Will the stock reach Pajjuri’s $1,100 price target? Don’t be surprised if it gets there, and then continues to head higher and prove the skeptics wrong.
On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.