Amid the AI fervor cooldown, investor enthusiasm for the top AI chip maker has waned somewhat. However, anticipation for Nvidia’s (NASDAQ:NVDA) next move higher persists. With earnings expected next month, recent sell-side analysis, particularly Raymond James’ Srini Pajjuri, have continue to put forward a bullish stance on the chip name. Pajjuri and others have increased their price targets on this name, with this particular analysis putting a price target of $1000 on Nvidia stock. Indeed, such moves suggest plenty of optimism remains in this name.
Citi analysts also maintain a positive outlook on NVDA stock, anticipating a “90-day positive catalyst watch.” Optimistic about supply chain discussions indicating prolonged GPU demand, Citi’s projections align with market estimates.
Nvidia’s Q4 earnings release date, slated for late-May based on past trends, could provide the next key catalyst for this stock. Anticipated strong results stem from robust demand for Nvidia’s AI-compatible chips, fueled by tech giants’ pursuit of AI software dominance.
Here’s more on why I think Nvidia stock remains a buy-and-hold stock to continue owning here.
Pioneering Drive Platform
At Nvidia’s recent GPU Technology Conference (GTC), Danny Shapiro introduced the Pstar 3, showcasing Nvidia Drive’s capabilities. This innovation will allow for data-driven features in new vehicles such as ultrasonics for safer navigation, cameras, radar, and more. The move could also create a whole new era for automotive AI.
Nvidia’s Drive platform features a specialized automotive-grade supercomputer designed to withstand harsh environmental conditions. This resilience ensures reliable autonomous functions globally. Shapiro detailed how Nvidia’s AI processes vast sensor data for quick decision making capabilities, which is essential for navigation and continuous system enhancement.
Nvidia’s approach includes generative AI within the Omniverse platform, crafting precise digital twins of vehicles and cities. This enables extensive testing and simulation of vehicle performance without physical prototypes. The Omniverse offers realistic simulations, allowing engineers to refine designs effectively and predict safety performance.
CEO Says AI Makes Society ‘Equitable’
Nvidia’s CEO, Jensen Huang, views AI as a means to foster social equity, contrary to common misconceptions about its purpose. At Oregon State University’s groundbreaking event for a computing research building named after him and his wife, Lori, Huang emphasized AI’s potential for uplifting marginalized communities. He stated that AI has leveled the playing field, marking it as the tech industry’s significant contribution to societal advancement.
Huang highlighted AI’s potential to democratize opportunities by assisting individuals in coding and accessing databases using natural language. He emphasized that AI could be a constant collaborator and tutor, addressing the limitations those without coding skills face. The couple pledged a $50 million donation to the research center in 2022 to support this vision.
The Jensen Grant
Recent reports indicate that the number of restricted stock units (RSUs) Nvidia stock will be providing employees will be boosted, depending on the company’s share price. The “Jensen special grant” would vest over four years, with the first installment on September 18. This move seems to be a smart one, incentivizing top engineers to stay with the high-flying tech giant, which has seen its share price soar of late.
Recent hires were reportedly given stock options valued at $200,000, with an additional $50,000 in RSUs issued as part of t his grant. Employees also received quarterly equity refreshers based on performance. Nvidia declined to comment on the matter, but overall, the market appears to be looking at this move as a key catalyst worth considering.
Bottom Line
In February, Nvidia stock exceeded expectations, with reported Q4 revenues hitting $22 billion, a 270% increase from the previous year. In March, Nvidia surpassed Aramco of Saudi Arabia, becoming the third of most valuable company worldwide. It also surpassed Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN), Nvidia’s peers in the Magnificent Seven, securing third spot in the U.S market.
Yes, Nvidia stock is a massive player in a high-growth market. But its valuation doesn’t look crazy at current levels. The company continues to see impressive growth. Until this trend abates, this is a stock I think remains worth owning at current levels.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.