On Thursday, DA Davidson adjusted its outlook on NVIDIA Corporation (NASDAQ:NVDA) shares, notably increasing the price target to $900 from the previous $620 while maintaining a Neutral rating. The significant adjustment comes in the wake of NVIDIA's robust first-quarter earnings for fiscal year 2025, which surpassed expectations.
The company's performance has bolstered the belief that NVIDIA will continue its leadership in the generative AI compute market throughout the year.
NVIDIA's customers are currently scaling up their AI infrastructure, and model providers are investigating more efficient compute solutions. This strategic positioning is expected to support NVIDIA's market dominance.
In addition to the financial success, NVIDIA announced a 10:1 stock split set to take effect on June 7, a move that could make the stock more accessible to a broader range of investors.
The firm's revised estimates are a reflection of NVIDIA's strong quarterly results and the anticipated continued demand for its AI compute solutions. Despite the upbeat earnings, DA Davidson's forecast for fiscal year 2025 remains below the consensus, leading to a cautious stance on the stock's outlook. The analyst anticipates a sequential decline in fiscal year 2026, which has resulted in what is considered a Street low estimate.
The new price target of $900 represents a substantial increase and reflects the firm's revised expectations for NVIDIA's financial performance. The Neutral rating indicates that while the analyst recognizes NVIDIA's current strength, there is a level of reservation regarding the company's future growth prospects in comparison to market expectations.
InvestingPro Insights
NVIDIA Corporation (NASDAQ:NVDA) has captured the attention of analysts and investors alike with its impressive performance and strategic positioning in the AI compute market. The recent robust first-quarter earnings for fiscal year 2025 have led to increased optimism about the company's growth trajectory. Reflecting this sentiment, InvestingPro data highlights a remarkable revenue growth of 125.85% over the last twelve months as of Q4 2024, showcasing NVIDIA's significant expansion in the market.
Investors considering NVIDIA's potential will note that the company is trading at a high earnings multiple with a P/E ratio of 78.03, which may suggest a premium valuation. However, the strong revenue growth and the company's stature as a prominent player in the Semiconductors & Semiconductor Equipment industry underscore the potential for continued growth, as indicated by the InvestingPro Tips. Notably, NVIDIA's stock has experienced a high return over the last year, with a 209.5% price total return, and is trading near its 52-week high, at 97.48% of the peak value.
For those seeking deeper insights and additional metrics, InvestingPro offers 21 more InvestingPro Tips for NVIDIA, which can be accessed by visiting InvestingPro's NVIDIA page. Investors can also take advantage of a special offer to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription with the coupon code PRONEWS24.
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