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Bernstein’s Stacey Rasgon told CNBC that NVIDIA stock will continue to rise.
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Given its huge profits, the stock is cheaper than other semiconductor companies.
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Apart from AI growth, the company will also receive a boost from its product roadmap.
Bernstein senior analyst Stacey Rasgon told CNBC on Wednesday that Nvidia’s sky-high valuation may give investors pause, but the chip maker’s stock price will continue to rise. .
In early January, the semiconductor company became the fourth most valuable company on the S&P 500 index, hitting a new all-time high.
On Wednesday afternoon, the company’s stock was trading around $556 per share.
While some are concerned about how long such a high valuation can sustain, Rasgon has a $700 price target on Nvidia and argues that trends in artificial intelligence will continue to boost the company’s performance.
“We talk about the stock price tripling, but look at how much the profits have gone up. Because of the size of the opportunity and how competitive we are within it, the profits may be six or seven times or whatever. I don’t know the numbers, but it’s increased.’Opportunities, product roadmaps and everything else,’ he said.
Nvidia’s latest earnings report showed third-quarter revenue of $14.51 billion, a 279% year-over-year increase.
Rasgon added that Nvidia’s multiple is very attractive given the pace at which earnings are outpacing stock price appreciation.
“In fact, if you can believe it, this is one of the cheapest ways to play the AI theme in this space,” he said. “AMD is much more expensive than Nvidia, Marvell is much more expensive than Nvidia, and even Intel is not that different from each other at the moment.”
Nvidia’s stock price rose 223% through 2023, making the chipmaker one of seven supercap tech companies to drive the S&P 500’s biggest rally. The company’s semiconductors are often used to build infrastructure, so it received a big boost from AI developments. Used by new technology.
The company’s momentum continues, with Rasgon highlighting new product launches that will keep the company at the top, including the Grace Hopper super chip and upcoming H200 GPU upgrades.
“Frankly, I don’t know if the multiple can go any lower,” he told CNBC in December.
Read the original article on Business Insider
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