Nvidia Stock Forecast: Why Nvidia Deserves A Price Target of $320

motek 1The Nvidia Stock Forecast article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary:

  • I correctly predicted last April 2 that Nvidia’s stock would hit $300 before June. My previous argument that COVID-19 is boosting Nvidia was judicious.
  • NVDA breached the $300 price barrier last April 27. It did it again last May 6, and it closed at $297.79. This is still higher than April 2’s closing price of $247.03.
  • My new 1-year price target for NVDA is $320. The inability of AMD to compete in data center GPUs means NVDA will continue to soar higher.
  • Nvidia will report its next quarterly earnings numbers on May 21. Going long on Nvidia two weeks before this happens might turn out profitable.
  • The predictive algorithm of I Know First has a super mega bullish one-year Nvidia stock forecast score.

I will not fault you if you do some profit-taking on Nvidia (NVDA) this week. This stock is now trading way above the closing price of $247.03 when I made a buy rating for it last April 2. A 20.5% price return is always a valid reason to rake in profits.

(Source: Seeking Alpha)

My Nvidia stock forecast on that April 2 article was spot-on. NVDA indeed breached the $300 barrier before June. Those of you who still want to earn more, you could hold on to NVDA and wait until it hits $320. This might happen if NVDA reports outstanding 1QFY2021 numbers on May 21. My takeaway is that video game developers/publishers are getting a strong boost from this pandemic. Consequently, gaming-related hardware vendors like NVDA also continues to enjoy the COVID-19

Why NVDA Is A High Conviction Buy Right Now

My loyal followers at Seeking Alpha often heed my buy recommendations. Many of them acted quickly on my opinion that pandemic-induced quarantines are boosting video games-related companies. I now hope that they will also understand why I now have a $320 one-year price target for NVDA. The COVID-19 pandemic persists as a tailwind for NVDA this year. Gamers forcibly stuck at home (and people working from home) have greater disposable income. They can afford to buy new PC graphic cards and/or Nintendo (NTDOY) Switch console products.

Overwhelming proof of this is the screenshot below. Nvidia’s pricey/high-end PC gaming graphics cards are the no.2 and no. 3 best-sellers at Amazon (AMZN). NVDA is a strong buy whenever its $500 gaming accelerator cards emerge as best-sellers. You should short Advanced Micro Devices (AMD) and buy more NVDA. Going forward, NVDA will always remain as the more profitable and safer bet on gaming and data center/AI GPUs. AMD is a beautiful mirage that seduces investors because it can now sell cheap video cards and x86 processors.

The COVID-19 catalysts for gaming and data center are for the long-term. More people are now being compelled to become PC or Switch gamers. More corporations are now buying very expensive Tesla GPUs to accelerate their cloud computing & work-from-home initiatives.  Anything that boosts the GPU sales of Nvidia is a good reason to buy more of its stock. GPU sales account for almost all (87%) of Nvidia’s annual revenue.

 (Source: Statista)

There is also a COVID-19 boost to the  Tegra Processor business of Nvidia. Being forcibly stuck-at-home, there are now compelled to buy the Switch console from Nintendo (NTDOY). Nintendo will no choice but to order more Tegra processors from Nvidia to meet the surging demand for Switch consoles. No thanks to this pandemic, I expect Nvidia to end its FY2021 with more than $1.55 billion in Tegra processor sales.

NVDA is a Buy Before Earnings

Nvidia will do its next quarterly earnings report on May 21. I am highly confident that actual 1QFY2021 topline and bottom-line numbers will better than the consensus of $1.68 EPS and revenue of $3 billion. My takeaway is that it is feasible for Nvidia to deliver EPS of $1.72 and $3.1 billion. The coming ER covers the March to April quarter of Nvidia. March and April were the peak months of government-mandated lockdowns/quarantines. I am treating this quarter like it’s the Christmas quarter.

NVDA has beaten EPS estimates for the past four quarters. There were no lockdowns/quarantines last year. I think NVDA can also beat consensus EPS for 1QFY2021.

(Source: Seeking Alpha)

Conclusion

My $320 one year PT is higher than the average PT at TipRanks. However, I am relying on my above-average IQ to pull me over the collective wisdom of those highly paid Wall Street analysts. I know that the SARS-CoV-2 virus that is causing COVID-19 is mutating. There is no forthcoming vaccine or universal cure for COVID-19 anytime soon. The majority of this planet’s citizens will continue to play games at home. The majority of employees and managers will still work from home for many more weeks to come.

The boost in gaming and data center segments convinced me that most TipRanks-tracked analysts are not correctly predicting NVDA’s one-year potential price movement.

NVDA Stock Forecast
(Source: TipRanks)

My high confidence over NVDA is also largely due to its super mega bullish one-year forecast score from I Know First. A stock only needs to score 100 to get a clear buy signal from I Know First. As you can see from the chart below, NVDA got a score of 603.37. My fearless forecast is that Nvidia’s stock will reach $320 before 2020 ends.

NVDA Stock Forecast

Past Success with Nvidia Stock Forecast

NVDA Stock Forecast

I Know First has been bullish on the NVDA stock forecast in past predictions. The I Know First algorithm issued a bullish outlook on February 10, 2020. The algorithm successfully forecasted the movement of NVDA’s stocks and rose by 18.36% after three months. See the chart below.

NVDA Stock Forecast

Here at I Know First, our AI-based algorithm has modeled and predicted assets price movement worldwide for short-term and long-term time horizons, ranging from 3 days to a year. Since 2011, we have been providing daily stock market predictions, as well as NVDA stock predictionUSD forecast, gold outlook, and, in particular, Apple stock news. Today, we are producing daily forecasts for over 10,500 assets. These quant trading forecasts generated by our quant trading tool are used by institutional clients, as well as private investors and traders to identify the best investment opportunities in the market.

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Please note-for trading decisions use the most recent forecast