Can Nvidia Stock Continue to Climb?

On October 15, Bank of America raised its 12-month target price for Nvidia (NVDA) stock from $225 to $250. The stock jumped 5.3% on the news and closed the trading day at $196.37 with a value of $119.6 billion. The higher target price represents a potential investment return of 27.3% over the next 12 months from yesterday’s closing price.

Bank of America analyst Vivek Arya reiterated his “buy” rating on the stock. According to MarketWatch, the analyst wrote in a note to clients that “[Nvidia’s] data center growth is on the cusp of benefiting from the next-big [artificial intelligence] landmark—the ability to accurately listen, understand, speak and contextualize human speech, referred to as natural language processing (or NLP)/conversational AI.”

Analysts’ recommendations for Nvidia stock

Analysts are bullish on Nvidia. As of October 15, as per a Reuters survey of 39 brokerages covering Nvidia stock, 27 recommended “buys,” nine recommended “holds,” and just three recommended “sells.”

On October 15, analysts’ consensus 12-month target price for Nvidia was $193.10, implying a 12-month investment return potential of -1.7%. The return is based on Nvidia’s last closing price of $196.37. The consensus target price for Nvidia is up from $186.31 in September, a rise of 3.6%.

RBC Capital increased its target price 14.2% to $217 on Nvidia stock. Meanwhile, Evercore ISI boosted its target price 21.6% to $225. Suntrust Robinson raised its target price on Nvidia stock 2.9% to $216.

Nvidia’s peers Intel (INTC), Micron (MU), and Advanced Micro Devices (AMD) have average broker target prices of $53.13, $54.48, and $33.48, respectively. These figures imply returns of 0.9%, 17.3%, and 9.0%, respectively, over the next 12 months.

Analysts’ earnings and revenue estimates

Wall Street analysts expect Nvidia’s third-quarter adjusted EPS to fall 14.1% YoY (year-over-year) to $1.58 and its total revenue to also fall 8.2% YoY to $2.9 billion.

In comparison, Intel is expected to report adjusted EPS of $1.24 on revenue of $18.0 billion. Meanwhile, AMD is expected to report adjusted EPS of $0.18 on revenue of $1.8 billion.

Stock performance

Currently, Nvidia stock is trading 21.4% lower than its 52-week high of $249.88. The stock is trading 57.78% higher than its 52-week low of $124.46. For the last 14 days, Nvidia’s relative strength index score is 69.20. The score shows that the stock looks overbought.

Nvidia has an upper Bollinger Band level of $191.12. The company’s middle Bollinger Band level is $179.14, and its lower Bollinger Band level is $167.17. On October 15, Nvidia stock closed near its upper Bollinger Band level, which suggests that the stock is overbought.

Nvidia stock has gained 47.1% year-to-date. This year, Intel, Micron, and Advanced Micro Devices have risen 12.2%, 46.4%, and 66.4%, respectively.

Nvidia’s dividend yield was 0.33% on October 15. While Micron and AMD don’t pay equity dividends, Intel’s dividend yield was 2.39% on the day.

Read Why Nvidia Stock Could Keep Rising and Intel Xe Could Join AMD and Nvidia GPUs in 2020 to learn more. Also check out Nvidia to Fight AMD’s ‘Nvidia Killer’ with Ampere.