Nvidia Stock Soars on Double-Sales Forecast and AI Acquisition
Nvidia's stock experienced a significant boost on Thursday after CEO Jensen Huang announced that he expects chip unit sales to double next year, with 70% revenue growth in the following fiscal year. The prediction sparked a 2.54% increase in Nvidia's stock price to $219.34.
On top of this forecast, Nvidia also made headlines for its acquisition of Hugging Face, an AI platform company, worth $12.93B. This deal, combined with the company's recent announcement of an $80B share repurchase authorization, has analysts believing that Nvidia's stock is mispriced.
UBS, a prominent investment bank, agrees with this assessment, stating that their HOLT model shows an 86% cash-flow return on investment. However, the current price implies 800bps margin compression and only 3% growth through 2029-30, which they see as too bearish.
Nvidia's stock has a beta of 2.22, indicating that it is more volatile than the market. With a consensus target of $324.34, representing around 48% upside from its current price, Nvidia's future prospects are looking bright.