Nvidia Stock Price Forecast March 2022 – Time to Buy NVDA Stock?
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Nvidia (NVDA) stock is up almost 6% today and has now bridged its YTD losses to around 16%. However, the stock is still down almost 25% from its 52-week highs and is in a bear market territory. What’s the forecast for NVDA stock and is it a good buy now?
Nvidia was among the best performing S&P 500 stocks in 2020 and 2021. The stock has created significant investor wealth over the last decade as it has grown its business multi-fold over the period, snatching away the market share from peers.
Last month Nvidia called off its deal with SoftBank to acquire Arm Holdings. The deal, which was structured as a mix of cash and stock would have made Nvidia the market leader in mobile chips. However, from the beginning, the acquisition was facing challenges in the UK. Finally, Nvidia decided that it was better to call off the deal.
Nvidia stock recent developments
Nvidia would hold its annual GTC technical conference next week between Monday to Thursday. It would also hold the annual analyst day on Tuesday which would have the keynote address by its CEO Jensen Huang. The next week would be crucial for NVDA stock and the announcements made at the event could have a market-moving impact.
Deutsche Bank analyst Ross Seymore expects Nvidia to provide a “characteristically positive message.” He said, “we look for the company to provide an update on sustainability of demand, supply trends, as well as any risk of crypto overhang (note increased risk language around crypto in recent quarterly filings/transcripts).”
Ross expects the company to upwardly revise the TAM (total addressable market) for its Data Center business. At the 2020 Analyst Day, the company had put the 2024 TAM at $100 billion. He also expects the company to provide an update on its automotive pipeline.
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As the electric vehicle and autonomous vehicle penetration grows, the demand for automotive chips would also increase significantly. NVIDIA is positioning itself to gain a strong position in the market.
NIO has unveiled its ET5 sedan, which would be a budget sedan from the Chinese EV (electric vehicle) company. The AI features on the car are powered by the NIO Adam supercomputer, built on four NVIDIA DRIVE Orin systems-on-a-chip (SoC). NIO’s ET7 sedan also featured Nvidia products.
Xpeng Motors, which is another Chinese EV company, also used Nvidia’s DRIVE Orin for AI feature Xpilot 4.0 in the G9 SUV. Nvidia has also won two significant wins with Jaguar Land Rover and Mercedes Benz.
Meanwhile, Ross does not expect the event to have much impact on NVDA stock. He said, “Despite the likelihood of a positively-toned analyst meeting, we expect the meeting to have relatively little impact on the stock itself, as NVDA’s shares are more likely to be influenced by market dynamics in the near term (macro/geopolitical volatility lowering/raising investor risk appetite) rather than its own fundamentals.”
Citi expects several key announcements
Citi analysts Atif Malik and Amanda Scarnati expect several key announcements at the event which they believe could drive the stock higher.
Credit Suisse is also bullish on NVDA stock ahead of the analyst day. It reiterated its outperform rating and said “YTD NVDA is down 19% vrs. SOX of –17% and SPX of –9% – against the backdrop of the current Semi cycle and a volatile geo-political environment, high multiple stocks have been negatively impacted by a market grappling with higher rates.”
NVDA stock forecast
Wall Street analysts are reasonably bullish on Nvidia stock. Of the 45 analysts covering the stock, 36 have a buy rating while seven have a hold rating. Two analysts have given the stock a sell rating. Its median target price of $350 is a premium of 33% over current prices.
Nvidia stock long term forecast
Nvidia is a play on multiple themes ranging from blockchain, 5G, autonomous driving, and the metaverse. JPMorgan, which is bullish on NVDA stock sees data centers/computing, PC gaming, and autonomous driving the company’s growth.
Nvidia could see strong growth amid the continued momentum in gaming. Metaverse could be another long-term driver for the stock where the company has come up with its Omniverse. According to Wells Fargo, “We see Omniverse as a key enabler/platform for the development of the metaverse across a wide range of vertical applications.”
Metaverse could a key driver for NVDA stock
Metaverse could be a multi-billion-dollar opportunity and several companies are focusing on the industry. This includes Facebook, which even changed the company’s name to Meta platforms to reflect its priorities.
The long-term forecast for Nvidia stock looks quite bullish looking at the various high growth themes that the company is targeting. Also, the digital transformation and growing gaming demand bode well for NVIDIA stock in the long term. The stock looks a good ancillary play on the digital transformation.
Should you buy Nvidia stock now?
Nvidia now trades at an NTM (next-12 months) PE multiple of 44.2x. The multiples have come down in line with other tech companies. Amid a slowing topline growth and rising bond yields, markets have derated several tech names. Meanwhile, if you are a long-term investor, Nvidia looks like a good buy.