Friday, February 23, 2024
Stock Market

Don’t Assume You ‘Missed Out’ on the Nvidia Stock Rally

Just because NVDA stock hit record highs, doesn’t mean there won’t be a bullish surprise

Source: Poetra.RH / Shutterstock.com

After last year’s powerful rally, is our Nvidia (NASDAQ:NVDA) stock forecast flipping from bullish to bearish? No way! If you feel like you “missed out,” don’t fret. Instead, get in the winner’s circle as the demand for Nvidia’s artificial intelligence compatible chips won’t likely subside anytime soon.

Maybe you’re worried that Nvidia stock will crash after last year’s epic rally, like technology stocks did in the year 2000. In response to that concern, we can quote Yardeni Research President Ed Yardeni. “It’s possible. If so, then it has a lot more upside before it crashes — if it crashes.” Rather than worrying about a potential crash, analyze Nvidia’s appeal and reasons for its success.

Mark Your Calendar: An Important Date for NVDA Stock

Nvidia has another opportunity to shine on Feb. 21 when the company reports its quarterly earnings results. Without a doubt, the perma-bears hope that NVDA stock crashes and burns on that day.

That’s unlikely to happen. We don’t have the quarterly results from Nvidia yet, but we have them from Big Tech giants like Meta Platforms (NASDAQ:META) and Amazon (NASDAQ:AMZN). These and other technology firms affirmed their commitment to investing in artificial intelligence (AI) technology.

This helps to explain why NVDA stock rallied after these other companies reported their quarterly earnings. Even when it wasn’t Nvidia’s time to shine, the market understood that if Big Tech businesses demand AI-compatible processors, that’s massively bullish for Nvidia.

Bank of America Global Research analyst Vivek Arya elaborated on this point, writing, “Results from top U.S. cloud customers suggest solid motivation for spending in genAI.”

Global X analyst Mayuranki De also seemed to support this line of thought. De observed that Meta Platforms’ “commitment to AI… includes billions in Nvidia chips to build a strong compute infrastructure for AI development.”

Chips for China Could Provide Potent Revenue for Nvidia

Really, you don’t have to wait until Nvidia reports its quarterly earnings results if you want to invest in the company for the long term. The aforementioned Big Tech companies will probably continue to demand Nvidia’s AI-enabled chips for years to come.

Besides, CEO Jensen Huang expects AI-chip demand to increase internationally as nations invest in their own “sovereign AI capabilities.”

Speaking of international affairs, it’s well known that the U.S. has restricted certain AI-chip exports to China. Nvidia has a brilliant workaround solution to these restrictions, however.

The solution is Nvidia’s H20 graphics card, which the company designed specifically for the Chinese chip market. Granted, the H20 won’t be as powerful as Nvidia’s flagship H100 AI chip. Yet, having less computing power what will allow Nvidia to export the H20 to China.

Just consider the potential for revenue generation here. Reportedly, the H20 graphics card will cost $12,000 to $15,000 apiece.

So, don’t worry about whether Nvidia will dominate China’s AI chip market or not. The H20 graphics card doesn’t have to be a number-one blockbuster seller in order to be a major moneymaker for Nvidia in 2024.

Nvidia Stock Forecast: The Rally Doesn’t Have to End Here

Some critics will always find excuses to stay out of a perfectly valid trade. They were wrong about Nvidia stock in 2023 and missed out on terrific buying opportunities.

They’ll surely continue to be stubborn this year despite all of the evidence of Nvidia’s AI-chip market prowess. Thus, our NVDA stock forecast calls for probable gains in 2024, and the stock absolutely deserves a confident “A” grade.

On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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