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.
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.