Nvidia Corporation (NVDA) Stock Price Will Likely Reach $1,000/sh in 2025, if Not Sooner

After the market close on February 21, 2024, NVIDIA reported it's fourth quarter earnings which beat analyst expectations with regard to both EPS and revenue. 

According to Seeking Alpha News: 

  • Nvidia (NASDAQ:NVDA): Q4 Non-GAAP EPS of $5.16 beats by $0.52.
  • Revenue of $22.1B (+265.3% Y/Y) beats by $1.55B.
  • Data Center revenue for the fourth quarter was a record, up 409% from a year ago and up 27% sequentially.
  • Gaming revenue was up 56% from a year ago and flat sequentially.
  • Professional Visualization revenue was up 105% from a year ago and up 11% sequentially
  • Outlook for the first quarter of fiscal 2025 is as follows: • Revenue is expected to be $24.0 billion vs. $22.03B consensus, plus or minus 2%. • GAAP and non-GAAP gross margins are expected to be 76.3% and 77.0%, respectively, plus or minus 50 basis points.

If the stock price is able to reach $1,000/share, it would be extremely impressive since there was a 4:1 stock split that occurred on July 20, 2021.  According to the FASTgraphs chart below, the stock price (black trace) has tended to follow the Normal P/E Ratio (blue line) of 39.22x since at least 2018. At yesterday's February 21st, 2024 closing price of $674.72, the Blended P/E was 52.27x, so the stock was approximately 25 percent overvalued according to those metrics. 

Even though EPS growth is expected to slow from 2025 through 2027, the chart below shows that the EPS estimates have increased significantly from 3 months ago and 6 months ago from 2024 through 2027 and additional estimate revisions are possible.  

While I do believe that the NVDA stock price will reach the $1,000/sh mark at some point in 2025, the stock is presently overvalued.  As of 852 am CST on February 22, 2024, the stock was trading as high as $778.98/share or +13.38% above yesterday's (February 21, 2024) closing price.  So the stock is greater than 25 percent overvalued and I would not initiate a position or add shares at this time other than a DRIP.  I think there will be a 5-15 percent correction with NVDA at some point in 2024 which would represent a slightly better entry point in my humble opinion. Any price correction greater of 20 to 25 percent or more from $778/sh would represent a good entry point for me personally, but not a huge amount.  

Here is a list of external links used in this blog article: 

Thank you for reading and feel free to comment on this blog.  

Disclaimer: This blog has been created for sharing my personal investment ideas only. I do not receive any compensation for this blog or the content within. I am not an investment advisor or professional. This blog is my own personal opinion and is not meant to be a recommendation of the purchase or sale of any stock or ETF. Please do your own due diligence and research before deciding to purchase any investments of your own.



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