Nvidia (NVDA) has experienced a remarkable 2024, with its stock surging nearly 179% year-to-date. In just the past week, shares rose by 2.4%, and the company has seen a 13.6% increase in October alone. As of Friday’s close at $138, Nvidia is approaching its peak close of $138.07 set on October 14 and has rallied nearly 40% from its lows in August. With a market capitalization of $3.4 trillion, Nvidia sits just behind Apple’s $3.6 trillion and ahead of Microsoft’s $3.1 trillion.
The momentum has caught the attention of analysts, who are raising their price targets for Nvidia. Chris Versace, a seasoned analyst and portfolio manager of the Street Pro portfolio, recently increased his price target from $155 to $175—a 12.9% hike. Based on Friday’s close, this could suggest a potential rise of nearly 28% for Nvidia shares over the next year. Versace noted that he would revisit the price target due to the impressive results from Taiwan Semiconductor, which supports Nvidia’s growth.
Bank of America Securities has been even more bullish, raising its target from $165 to $195, an increase of 18.2%. This upgrade stems from ongoing investments in AI-related applications by major players such as Alphabet (GOOGL), Amazon.com (AMZN), Microsoft (MSFT), and Meta Platforms (META). These companies have been continually revising their capital expenditure estimates, with Alphabet set to report its third-quarter earnings on October 29, followed by Microsoft and Meta on October 30, and Amazon on October 31.
Taiwan Semiconductor (TSMC) has also reported strong growth, indicating a positive outlook for the semiconductor industry. In its third-quarter earnings report, TSMC revealed revenues of $23.5 billion, a 36% increase from the previous year, with a gross profit margin of 57.8% and a net profit margin of 42.8%. TSMC’s shares have risen 15.6% in October alone and are up an impressive 93% in 2024, placing the company in the elite group of firms with market capitalizations exceeding $1 trillion.
However, the semiconductor industry faces geopolitical risks, particularly regarding Taiwan’s relationship with China, which claims the island as part of its territory. Additionally, TSMC’s plans to build a plant in Arizona have encountered construction and staffing challenges, potentially complicating future growth.
As Nvidia continues to dominate the semiconductor landscape and capitalize on the burgeoning AI market, all eyes will be on upcoming earnings reports from key industry players. With analysts optimistic about Nvidia’s trajectory, the coming months may further solidify the company’s position as a leader in technology and innovation.
