Nvidia Stock Forecast: Morningstar Analysts See Undervaluation Opportunity
Morningstar analysts believe Nvidia stock is highly undervalued and has more upside to go.
The analysts point to Nvidia's market share in the GPU industry, its CUDA software that enables companies to transform normal GPUs for data center use, and its strong earnings growth.
Nvidia's revenue jumped by over 80% in the first quarter, while its profit margin is about 60%. Wall Street analysts predict that the company's earnings will continue growing, with an average estimate of a 96.4% increase in second-quarter revenue to $91.8 billion.
The company faces challenges from increasing competition in the GPU industry and concerns over circular investments. However, Morningstar believes Nvidia should trade at a premium due to its strong performance and growth prospects.