Wall Street’s continued fascination with NVIDIA (NASDAQ:NVDA) stocks persists following Truist’s decision to raise its target price from $128 to $140 per share, representing a 13% increase from current levels. This adjustment comes at a time when Nvidia recently surpassed Microsoft (NASDAQ:MSFT) as the world’s most valuable publicly traded company. Truist, however, believes that despite this achievement, the path ahead for Nvidia is still open, with analysts noting that potential business and technical challenges may limit the stock’s upside.
Interestingly, Truist’s analysis indicates that holding the top spot in market capitalization does not necessarily impact future investment returns. Looking at other companies that have previously held this position, Truist found that while initial stock performance may stagnate compared to others, S&P 500 stocks generally outperform the benchmark over the long term.
Despite potential challenges, Truist analysts maintain their positive outlook on Nvidia as a prime choice for investing in the AI frenzy. They point to the chipmaker’s strong industry connections and the increasing demand for its GPU architecture as key factors supporting this stance.
Nvidia’s stock has experienced a remarkable year in 2024, driven by the AI craze. The company’s market cap has surged, making it the most valuable publicly traded company globally. As of now, NVDA stock has risen by 156% in 2024, with Nvidia adding substantial value to its market cap within a short span of six months.
Nvidia’s quarterly earnings have also been impressive, with the company surpassing expectations in revenue, net profit, earnings per share, and forecasts during its April earnings report. As AI stocks lead the market this year, Nvidia, as a major semiconductor producer focused on data centers, is well-positioned to see further growth.
The author of the article, Shrey Dua, who holds a degree in economics and journalism, offers well-informed analysis on a range of topics, from financial regulation to the electric vehicle industry. His work has been featured in various publications, including Morning Brew and Real Clear Markets. The opinions expressed in the article are solely those of the author and are subject to InvestorPlace.com’s publication guidelines.
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