On Thursday, Loop Capital initiated coverage on shares of NVIDIA Corporation (NASDAQ:NVDA) with a Buy rating, accompanied by a price target of $1,200.00. The firm's analysis suggests a strong potential for NVIDIA's growth, projecting a 63% appreciation in the stock's value. The optimism is rooted in the anticipation of NVIDIA outperforming the Street's estimates for the calendar years 2024/2025 and 2025/2026.
The firm's positive outlook is based on the belief that we are at the beginning of a 3 to 5 year period of foundational build for GPU compute and General AI across Hyperscale data centers. Despite the expected emergence of additional silicon providers, including AMD (NASDAQ:AMD) and INTC, as well as Hyperscale-specific internal silicon solutions, Loop Capital's research indicates that NVIDIA's largest customers are poised to absorb all of NVIDIA's supply in 2024 and 2025.
Loop Capital's price target of $1,200.00 for NVIDIA is derived from a 30x multiple of the firm's projected $40.00 earnings per share (EPS) for NVIDIA in the calendar year 2025, which aligns with NVIDIA's median price-to-earnings (P/E) ratio. This valuation reflects the firm's confidence in NVIDIA's performance and market position in the coming years.
The firm's analysis underscores NVIDIA's strong position in the market, particularly in the sectors of GPU compute and artificial intelligence. Loop Capital's endorsement of NVIDIA's stock with a Buy rating and a $1,200 price target highlights the potential for significant investor returns and NVIDIA's role in the evolving technological landscape.
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