The recent 12% pullback in Nvidia (NASDAQ: NVDA ) stock, which brought its price back below $120, presented a lucrative opportunity for investors to “buy the dip” and opened many questions about the future of the most popular manufacturers of semiconductors and its stock price in future years.
Shares of NVDA opened trading on June 28 at $125.38, with a positive gain of 2.49% from the pre-market and a 3.23% advance in the previous five trading sessions.
While it may be difficult to predict what the next few years will hold for NVDA stock, next year is only six months away, and the narrative is already shaping up regarding Nvidia’s 2025 stock price target.
The Nvidia company reaching the top spot will benefit NVDA shares
Nvidia recently passed Microsoft (NASDAQ: MSFT ) to become the world’s most valuable public company, with a market cap that reached $3.34 trillion on June 18. However, Nvidia shares fell in subsequent sessions, causing it to lose its lead to both Microsoft and Apple (NASDAQ: AAPL ).
Despite this, Truist Securities analysts believe that reaching the number one level of the market does not systematically challenge future investment returns.
Their comprehensive analysis of data from the past 26 years shows that stocks such as Microsoft, Cisco (NASDAQ: CSCO ), ExxonMobil (NYSE: XOM ), Apple and Amazon (NASDAQ: AMZN ) initially outperformed the S&P 500 over the term short after reaching the main market cap, but generally outperformed over the long term over one-year, three-year and five-year periods.
William Stein raised his price target on NVDA shares from $128 to $140, reflecting strong confidence in Nvidia’s long-term growth potential despite short-term market volatility.
Key factors work in favor of NVDA stock
Ray Wang, founder and principal analyst at Constellation Research, remains bullish, setting a $200 price target based on seven key factors. These include Nvidia’s visionary leadership, high barriers to entry in the chip market, significant switching costs, dominant market share and broad product roadmap.
Wang highlights Nvidia’s ecosystem, which has established its GPU as the standard for artificial intelligence (AI) applications, and points to the company’s impressive growth and profitability metrics.
He argues that “when we’re looking at Cisco, Intel, Nvidia has learned from these lessons, and they have to go far beyond just building chips, what Nvidia has done, it’s built partnerships that will last into the next era.” “.
The recent volatility is typical for a stock like Nvidia
Ben Reitz, Head of Technology Research at Melius Research, suggests that this volatility is typical of Nvidia and is driven by rebalancing and profit-taking.
Despite short-term fluctuations, Reitz underscores Nvidia’s dominance of the AI market through its holistic approach, as he assigns it a “buy” rating with a $160 price target, drawing parallels with the Wintel duopoly and the success of the iPhone of Apple.
He believes that “Nvidia has the best upside of all the Magnificent Seven stocks we cover, although we really like Apple and a few others.”
Reitz points to Nvidia’s foresight in building a strong computing language and ecosystem that monetizes AI, ensuring sustainable growth. Despite the stock’s recent moves, he remains bullish, noting Nvidia’s unparalleled pace of innovation and market share.
It also hints at the potential for significant shareholder returns, given Nvidia’s projected $270 billion in cash generation over the next three years.
Analysts’ tone on Nvidia stock in 2025 seems set as they see the chipmaker giant poised to continue with earnings next year.
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