NVIDIA Soars 24%, Approaching $1 Trillion Market Cap... Wall Street Raises Price Targets One After Another

Shares of U.S. semiconductor company Nvidia surged more than 24% on the 25th (local time), bringing its market capitalization close to the $1 trillion mark. This was driven by a sharp increase in demand for AI semiconductors and the company’s better-than-expected Q2 earnings forecast released the previous day. Wall Street investment banks also immediately raised Nvidia’s target price to as high as $500, supporting this rally. They see more than 30% additional upside potential going forward.

On the day, Nvidia’s stock closed at $379.80 per share, up 24.37% from the previous session, on the New York Stock Exchange. Based on the closing price, its market capitalization reached approximately $939.2 billion, bringing it closer than ever to becoming the first semiconductor company to surpass $1 trillion. On the same day, other tech stocks expanding AI investments, such as Microsoft and Google Alphabet, also recorded gains of around 2-4%. Semiconductor stock AMD jumped more than 11%. Ed Moya, senior market analyst at OANDA, said, "Everyone is watching Nvidia closely," adding, "It’s a welcome break from the Federal Reserve’s tightening, debt ceiling negotiations, banking risks, and inflation," describing the market sentiment.

What surprised the market was Nvidia’s earnings forecast announced after the market closed the previous day. Nvidia expects Q2 revenue to reach $11 billion, driven by a surge in demand for its AI semiconductors amid the generative AI boom led by ChatGPT. This figure is more than 50% above Wall Street estimates. Nvidia currently holds about a 90% market share in the AI semiconductor sector.

[Image source=Reuters Yonhap News]

Wall Street investment banks immediately raised Nvidia’s target prices. JP Morgan increased its target to $500 per share, roughly double its previous target. Considering the closing price that day, this implies more than 39% upside potential. This is also the highest target among Wall Street investment banks. Harlan Sur, a JP Morgan analyst, cited "massive demand for generative AI" as the reason for the target price increase and expressed a positive outlook, saying, "A stronger wave is coming."

Evercore ISI also raised its target price from $320 to $500. Analyst C.J. Muse said, "What else can you say besides wow? I’ve never seen this speed before," and evaluated that "Nvidia will grow long-term." Barclays also raised its target price by 82% to $500. Blaine Curtis, a Barclays analyst, said, "The market is moving fast, and Nvidia is the only solution that can power the large language model (LLM) wave."

Bank of America (BoA) raised its target from $340 to $450, Baird from $300 to $475, and Citi from $353 to $420. Baird analyst Tristan Gerra highly rated Nvidia’s capabilities, saying, "There is no meaningful competitive threat in the short term." Meanwhile, Deutsche Bank raised its target to $390, presenting a relatively lower target price.

Meanwhile, the Nasdaq Composite Index, which is tech-stock heavy, closed up 1.71% on the day. The Dow Jones Industrial Average, however, ended slightly lower amid concerns over the U.S. federal government’s default risk and a warning from Fitch about a downgrade of the U.S. sovereign credit rating. Dalan Kremer, co-chief investment officer at Sutowity, said, "From a macro perspective, technological innovation can outweigh the headwinds of economic slowdown and interest rate hikes," and assessed that "technology and growth stocks are not dead."

This content was produced with the assistance of AI translation services.