Investors thinking that it’s about time for NVIDIA (NASDAQ: NVDA) stock to slow down are going to be disappointed, according to Wall Street. Though investors already into the stock are likely jumping for joy.
Nvidida stock has already seen shares jump an incredible 213% in the last year at the time of writing this article. However, analysts at Goldman Sachs (NYSE: GS) believe there is far more to come.
How much?
Not only do the analysts at Goldman Sachs believe that Nvidia stock will keep up the momentum, but also that it’s headed towards US$800 per share. This comes as the company has proven that its model demonstrates consistent growth. Not just through the first half of this year, but all the way through 2025.
The analysts were particularly encouraged by the cloud service providers spending on artificial intelligence (AI). This has expanded Nvidia’s customer profile in the short term. Yet when it comes to the long term, analysts are positive about this as well.
Nvidia recently put new products on offer, which will attract even more companies looking to the chipmaker. This includes faster graphics processing, for example. So for now, the stock looks like it could hit that US$800 share mark. But how long could that last?
Considerations
There is still a healthy debate as to whether Nvidia stock could sustain the confidence built around its business. The company has quickly become one of the Magnificent Seven, surpassing the US$1 trillion market cap mark. And to keep up that market cap, it’s going to have to continue growing.
Right now, the demand is intense for its data-centre business. And that will continue well into 2025. But as it catches up to demand, how will the company continue to keep investors coming back for more?
It seems that right now the demand comes mainly from AI, and the beneficial aspects of the AI product. And this was demonstrated in company results, not just from Nvidia but others as well. Companies across the Magnificent Seven were able to demonstrate that AI contributed heavily to growth in the business.
Bottom line
If you’re considering Nvidia stock, it absolutely looks like a strong company that will continue to be strong for at least the next year or two. In fact, as long as AI and faster processing demand continue, Nvidia stock will continue to be the biggest benefactor. But demand can’t keep going on forever. And when that happens, there could be a drop in share price.
Instead of thinking of Nvidia stock as one that you should buy and hold forever and ever, think of it instead as a lifecycle. The company will likely peak at some point, and shares will start to come down. I’m not saying that will happen any time soon at all. However, it will happen eventually.
With that in mind, it’s important to keep your investments focused on your own goals. If Nvidia stock is part of that, at what point do you want to get out of the stock, rather than just get into it? If it’s that US$800 mark, make sure you stick to it. That way, you won’t be disappointed should demand and shares start to drop.
