NVIDIA Corporation (NVDA) stock price to $200?

As from the topic of the article, you will wounder how in the world we have put a $200 target for Nvidia stock. This is a result of our machine learning model that predict the future stock prices.

As to explain the chart our machine learning model has analysed data from 2016 till 2024 September. If you have looked past predicting performance, it has being fairly accurate in predicting long term price movement of Nvidia Stock prices. I know this has no value to a short term investor, but to a long term investor this is really valuable in term of deciding whether to keep the stock in the investment portfolio or not.

We think Nvidia could rise to $200 by April of 2026 from the current price of $120. which is a return of 66.667% If you invest today 1st October 2024.

Let’s figure out fundamental aspect of this target, How it is possible for Nvidia to rise to $200 and what needs to change in the under the hood to the achieve this target.

The Nvidia Stock is trading with a PE multiple of 54.70 (Trailing Twelve Months), while the industry peers such as AMD currently trading at PE multiple of 190.54 (Trailing Twelve Months)(TTM). So in term of PE ratio there is a quite a room to grow. Which means if the price of the stock price rise to $240 from $120, Nvidia will still undervalued compared to AMD and at $240, if the earning for the future level stay at the past level, it will have a PE ratio of 109.4 so even at $240 its still cheaper compared to AMD. Of course! Of course! it depends on the assumption that Nvidia earning per share remain at the same level.

Outlook of Semiconductor Industry

We looking at the semiconductor industry we have to look at the industry as two sectors where there is semi conductor manufacturing based on contracts and Semi conductor development, Nvidia is in the forefront of development and outsourcing of it manufacturing to Taiwan Semiconductor manufacturing company (TSMC), this is where the issue. There is a good chance that China invading Taiwan to control the US Semiconductor manufacturing which could impact the Semi conductor manufacturing and Nvidia.

We believe the main driving force going forward for the Semi conductor industry would be the Artificial Intelligence (AI) and Machine Learning (ML).

In order to run ML and AI models, companies going to use Data centers and cloud computing ( “a cloud that is above us ” Kamala Harris) which will drive demand for server processors, memory chips and storage solutions. We also believe that automotive electronics certainly will require more and more semiconductors to run its system specially electric cars since its getting smarter and smarter specially tesla Models.

Challenges