The size of a company matters for investors, as firms owning a large market cap can offer greater stability versus those with a smaller stake. There also are very few companies that have made it to the $2 trillion club in market cap, but Nvidia (NVDA) stock is one.
Along with being in the $2 trillion club, Nvidia is part of the Magnificent Seven. Now, there are several other Magnificent Seven stocks also in the same fast company as Nvidia in the $2 trillion club: Apple (AAPL), Google-parent Alphabet (GOOGL) and Microsoft (MSFT).
↑X NOW PLAYINGNvidia Is Dominating The AI Game. Can It Continue?
But Nvidia is the only one to also hold the title of Investors' Business Daily sector leader.
Sector leaders are stocks that have proven their mettle due to their stellar sales and earnings growth in recent quarters and price performance. And Nvidia heads the chip sector, one of 33 IBD covers.
After three quarters of declines in sales and earnings, the leader in artificial intelligence chips reported strong growth on both fronts in more recent earnings reports.
Triple-Digit Growth Expected For Nvidia
For the fourth quarter, Nvidia reported earnings of $5.16 a share on sales of $22.1 billion. Both were higher than analyst estimates of $4.59 a share on sales of $20.4 billion.
For the first quarter, analysts polled by FactSet expect sales of $24.6 billion or a 242% growth while earnings are seen coming in 473% higher at $5.20 per share.
The stock gained 239% in 2023 and is more than 70% higher already this year. The S&P 500 gained 24% in 2023 and is just 6% higher so far this year. Nvidia holds best-possible scores of 99 for Composite Rating and EPS Rating, while its Relative Strength Rating is a near-ideal 98. Shares are in a consolidation with a buy point of 974 ahead of earnings on May 22.
More funds have been buying the sector leader over the past six quarters. Institutional support in recent weeks has also brought the stock's Accumulation/Distribution Rating up to C.
Nvidia StockAnalysts Increase Price Targets
Meanwhile, there are plenty of analysts rooting for the stock, even after its spectacular surge in 2023.
When Nvidia held its GTC Conference for AI developers in March, the company disclosed its latest AI chip, Blackwell. At the time, Timothy Arcuri at UBS increased Nvidia's target price to 1,100 from 800 while maintaining a buy rating.
Earlier, Truist analyst William Stein raised his price target on Nvidia stock to 1,177 from 911, while maintaining a buy rating on expectations that robust demand for its advanced AI chips will drive sales in 2024 and 2025.
There's more. HSBC analysts also increased their price target on the AI stock to 1,050 from 880 ahead of the GTC conference. And Bank of America analysts are bullish on the stock with a price target of 1,100.
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