A new record and $550 billion in capitalization in 4 days. Is there room for Nvidia stock to grow?

The securities of chipmaker Nvidia rose by 2% to $219.44 on May 11, which became their maximum value for all time on the stock exchange. The previous record was set on April 27.

Monday marked the fourth consecutive session in which Nvidia stock closed the day in the plus column. And this is the best four-day streak of growth since October 29, according to Dow Jones Market Data, cited by Barron's. Over those four sessions, the company's stock jumped 13%, adding $550 billion to its market capitalization. By comparison, only 18 U.S. issuers, including Nvidia itself, are worth more than $550 billion.

The chipmaker's capitalization has reached $5.4 trillion - that's more than the entire health care sector and- 59 companies in the S&P 500, Barron's notes.

At the same time, the growth of Nvidia shares since the beginning of the year is only 17.6%, while the competitors show much stronger dynamics, notes Barron's. Quotes of Intel soared during this time by 251%, and AMD - by 114%. Their securities rose in price amid interest in the use of central processing units (CPUs) for data processing in response to user requests for AI, the publication explains. Previously, such requests were handled by graphics processing units (GPUs) such as Nvidia's chips.

"The gold standard of AI investment - Nvidia - is now stagnating, while second-tier companies are hitting new highs almost every day," Barron's quoted independent analyst Richard Windsor, author of the Radio Free Mobile blog, as saying in a note. - Market attention has also shifted from chip supply to power supply and CPUs as they are fast becoming a bottleneck."

The next big driver for Nvidia stock is likely to be its May 20 earnings report, Barron's writes. Wall Street expects the company to report a 78% year-over-year increase in revenue last quarter.

"We believe there will be a strong report ... significantly ahead of expectations and raising our own forecast," Melius Research analyst Ben Reitzes wrote in a note cited by Barron's. - [Nvidia] shares are trading well below the company's long-term growth rate and at an astounding discount of about 50% to AMD's stock, adjusted for the impact of stock options."

Ryces recommends buying shares of the leading chipmaker and has set a $380 target price, suggesting a 73% upside potential. That's the most optimistic estimate among Wall Street analysts tracked by FactSet.

The consensus target price is $269.8, up 23% from the close of trading on Ma. 11. Nvidia securities are advised to buy by 65 out of 70 analysts.

This article was AI-translated and verified by a human editor