Continuing on this weekend's theme, and since Nvidia has been so big in the financial news lately, here is a pro vs con analysis of the company and whether or not we should or should not be buying the stock. It's a short market week ahead.
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When a stock triples in six months, the question inevitably becomes: Is this real? And that is the case for Nvidia Corp. (ticker: NVDA), the California-based chipmaker whose shares have zoomed higher this year on optimism that its products will lead the way in the artificial intelligence revolution.
AI has been around for years, in some form, but the stock market's focus on it has sharpened with last fall's release of ChatGPT, a Microsoft-backed chatbot that uses AI to perform many of the functions of a search engine, gaining 100 million users within months. Nvidia's gaming chips, long the envy of the industry, gave Nvidia an edge in pursuing emerging markets because its graphics and other capabilities anticipated the needs of metaverse, cloud computing and AI work, says Dan Ives, a tech analyst at Wedbush.
All the buzz has analysts projecting that Nvidia's profits will also skyrocket, reaching as high as $8.90 a share this year after coming in at $1.76 in the fiscal year that ended in January. Then the inflection really starts: Consensus estimates for fiscal 2025 are as high as $14.33, with 2026 estimates ranging up to $19 a share.
Does all of that justify a stock price of $430, though?
We looked for three reasons why investors might consider it, and three offsetting reasons why they might either sit this one out or wait for a dip before entering.
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