$NVIDIA(NVDA)$ NVIDIA's expansion into AI factories, particularly in partnership with Saudi Arabia, represents a strategic move to tap into the growing global demand for AI and data infrastructure. This news underscores NVIDIA's dominance in the AI chip market and its ability to align with major geopolitical and economic initiatives like Saudi Arabia's Vision 2030.
Reflecting on NVIDIA at $120
For long-term investors, NVIDIA at $120 represented a remarkable buying opportunity, considering its dominant position in the AI and GPU sectors. Missing out or selling too early may evoke regret, but hindsight investing isn't always fair—market conditions then were vastly different, and the AI boom hadn't fully materialised.
If you're considering whether to re-enter the stock now, the key question is whether NVIDIA's current valuation reflects its growth potential or if there's still room for appreciation.
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Bullish Case Till Earnings
NVIDIA's strong fundamentals, coupled with its leadership in AI chips (e.g., H100 and the upcoming Blackwell chips), make it a favourite among growth investors. The AI revolution has just begun, and NVIDIA's involvement in cutting-edge projects like AI factories bolsters its growth narrative. Here's why the stock could remain bullish till its earnings:
1. Data Center Expansion: AI factories are expected to drive demand for NVIDIA's chips, boosting data center revenues.
2. Earnings Momentum: Recent quarters have shown consistent beats, and the next earnings report could deliver similarly strong results.
3. AI Demand: As generative AI adoption grows, NVIDIA's products will remain integral to enterprises and governments worldwide.
That said, the stock may already be pricing in substantial growth, leading to heightened volatility around earnings announcements.
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Price Target (PT)
Analysts' price targets for NVIDIA vary widely depending on growth assumptions. Here's a breakdown of possible scenarios:
1. Base Case: Assuming sustained revenue growth and moderate expansion in AI-related markets, the stock could reach $550–$600 over the next 12 months.
2. Bull Case: If NVIDIA surprises on earnings or announces additional high-profile partnerships, the stock could push to $700+, especially if global AI investments accelerate.
3. Bear Case: A macroeconomic slowdown or decreased spending on AI infrastructure could cap the stock around $450–$500.
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Conclusion
If you missed the rally from $120, regret won't help—focus instead on NVIDIA's future trajectory. The AI sector remains in its early stages, and NVIDIA is well-positioned to capitalise on this trend. While the stock is richly valued, a strong earnings report or positive developments in its partnerships could drive further upside.
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