Nvidia, a dominant player in the data center GPU market, has seen significant gains since the launch of ChatGPT in November 2022. Its shares have skyrocketed by 150% this year, contributing to a third of the gains in the S&P 500. Historically, Nvidia has performed better in the second half of the year, following upbeat first-half returns with positive second-half returns in 89% of years. Analysts are optimistic about Nvidia’s future, with a majority recommending it as a good buy. However, the average 12-month price target indicates a limited 3% upside from the current price. Despite consistently beating revenue and earnings estimates in consecutive quarters, there is a concern about high expectations leading to a potential market disappointment. Nonetheless, analysts see Nvidia as a strong player in the AI market, with GPUs being essential for modern AI advancements. Wall Street analysts project Nvidia’s earnings per share to grow at 33% annually over the next three to five years. With a reasonable valuation and potential for market outperformance, Nvidia is considered a promising long-term investment option. Investors should consider the company’s strong performance history and the ongoing growth of the AI industry when making investment decisions in the second half of 2024 and beyond.
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https://www.fool.com/investing/2024/06/27/nvidia-stock-up-150-ai-stock-do-this-second-half/
