Nvidia (NVDA) stock has reached an all-time high, but one analyst argues that it is still “cheap.”
“We cover a diverse basket of AI-related stocks, and Nvidia is now trading at a modest premium to the group on a PE basis,” Melius research analyst Ben Reitz said in a note to investors. “Can we call Nvidia cheap now?”
The analyst noted that the graphics chip giant’s stock is trading at 28 times consensus earnings forecasts for 2024.
“This multiple is below the statistics of AMZN (AMZN), ADBE (ADBE) and MSFT (MSFT) – although Nvidia’s estimates may be among the most conservative,” he said.
After posting back-to-back explosive quarters in 2023, Navia is up 240% year over year. The company’s second-quarter earnings missed high expectations as the AI hype train continued to lift the stock.
Results like these prompt analysts to ask, “How far can the stock go?”
Melius Research has a buy rating on the stock, with a price target of $730 versus the average consensus street price of $643.
The highest price target assigned to the stock by Rosenblatt Securities analyst Hans Mossmann is $1100.
Shares of the chipmaker rose to about $499 each on Wednesday.
Nvidia stock has 56 buy, four hold and zero sell ratings.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter @ines_ferre.
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