Evercore ISI Just Raised Its Price Target on Nvidia (NVDA) Stock – InvestorPlace
An aggressive long-term call is catching eyeballs
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Even with the blistering run of Nvidia (NASDAQ:NVDA), analysts continue to express support for the semiconductor giant. The latest strong endorsement comes from Evercore ISI, which raised its price target to $145, implying more than 20% upside. Ultimately, Evercore believes that NVDA stock may end up representing 15% of the S&P 500.
That’s a lofty goal considering that, presently, the second and third largest companies in the U.S. account for 13% of the index’s total market capitalization, according to MarketWatch. However, it’s quite possible that the 10-for-1 split of NVDA stock could spark even more upside for the firm.
According to Evercore strategist Julian Emanuel, “The history of other ‘marquee’ tech stock splits has been ‘rally first’ then selloff/volatility after the split; such volatility resets the generational buying opportunity, time after time.”
Citing other companies that benefited from technological revolutions such as Amazon (NASDAQ:AMZN), it’s possible for the NVDA stock split to coral more bullish enthusiasm and not just because of the enhanced access among retail investors. Rather, Nvidia — like Amazon — may fundamentally change the way business is run in its core industry.
Analyst Mark Lipacis, who moved from Jefferies to Evercore, just made a big splash for the new employer with his take on NVDA:
“History suggests NVDA could become 10-15% of S&P 500 […] We have observed that at each successive computing era, the ecosystem players represent a larger weighting of the S&P 500.”
That’s high praise for NVDA stock, and it’s not without merit. According to CNBC, following its more than 200% surge in the past 52 weeks, the company’s present weighting in the benchmark index has expanded to 6.6%, citing FactSet data. Still, it must be said that Nvidia has tough competition. Microsoft (NASDAQ:MSFT) holds a 7% weighting and Apple (NASDAQ:AAPL) holds 6.4%.
Ultimately, Lipacis remains confident in NVDA stock, telling clients to continue bidding up shares ahead of this anticipated weighting expansion. Given this projection, the argument is that NVDA stock is technically undervalued.
That too may be a tough pill to swallow. However, part of the bullish argument is that several years ago, Nvidia focused on the gaming industry. Per Statista, total sales of that sector grew from $7.98 billion in 2000 to $19.7 billion in 2009, translating to a compound annual growth rate (CAGR) of around 10%.
Today, the focus is on artificial intelligence (AI). Per Grand View Research, this sector could generate revenue of over $1.81 trillion by 2030, translating to a CAGR of 36.6%.
On the date of publication, Josh Enomoto did not hold (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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
Technology, Artificial Intelligence, Semiconductor
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Article printed from InvestorPlace Media, https://investorplace.com/2024/06/evercore-isi-just-raised-its-price-target-on-nvidia-nvda-stock/.
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