NVIDIA Stock Hits Record High Amid Strong Growth Prospects
NVIDIA (NVDA) stock reached a new record high on Friday, October 5, trading at around $237 per share. The company's market value now approaches $5.7 trillion, marking its first record high since May. The surge was primarily driven by favorable macroeconomic factors, including a lower-than-expected increase in US payrolls, which reduced the likelihood of a Federal Reserve rate hike in October.
Company-specific news also played a role in the stock's rise. On September 28, NVIDIA expanded its buyback authorization by $150 billion, bringing the total remaining capacity to $235 billion, with plans to execute the buybacks through fiscal 2028. Additionally, Morgan Stanley reiterated its recommendation of NVIDIA as a top semiconductor pick, citing the company's strong position and undemanding valuation.
This morning, Foxconn, NVIDIA's largest server manufacturer, reported a 47% increase in third-quarter revenue to T$3.03 trillion ($95.4 billion), surpassing estimates. Analysts have set a mid-case target price of $575 for NVIDIA stock by January 31, 2031, based on assumptions of 25.1% annual revenue growth, a net income margin of 53.4%, and a shrinking P/E ratio.
The target price of $575 represents a 145.8% total return from the current stock price, or an annual return of 23.1%. However, achieving this target depends on NVIDIA maintaining growth above the projected 25.1% as its revenue base expands.