Nvidia stock jumps on Wall Street praise, bolstering the Club case in the chipmaker

Published Thu, Feb 23 20233:24 PM ESTUpdated Wed, Mar 8 20232:22 PM EST

Kevin Stankiewicz @in/kevinstankiewicz @kevin_stank

Wall Street analysts on Thursday widely cheered Club holding Nvidia 's (NVDA) fiscal year 2023 fourth-quarter results, prompting an avalanche of price-target increases and a new buy rating from once-skeptical Goldman Sachs. The overwhelmingly positive reaction underscores the quality of Nvidia's business fundamentals, along with the opportunity we've been touting for the company to grow on the back of its maturing artificial intelligence (AI) capabilities. Shares of Nvidia surged nearly 14% Thursday, to over $236 apiece, bringing the stock's year-to-date gains to roughly 62%. The view from Wall Street In the 21 notes from major research shops the Club reviewed Thursday, 18 analysts boosted their price targets following Nvidia's better-than-expected results Wednesday evening — ranging from the high end of $320-per-share at Rosenblatt Securities all the way down to $200 apiece at Deutsche Bank. Fourteen of those 18 analysts rate the stock a buy, or buy equivalent, compared with four who maintain hold ratings. But Goldman Sachs was the only bank to raise its stock rating on Nvidia, to buy from neutral, making its research note on the chipmaker Thursday's most notable. In addition to now recommending clients buy Nvidia stock, Goldman boosted its 12-month price target to $275 a share from $162. That implies a nearly 33% upside from where the stock closed Wednesday, at $207.54 a share. "The combination of positive estimate revisions and a potential expansion in the stock's multiple — consistent with historical recovery phases — will drive continued outperformance in the stock," Goldman analysts wrote. The analysts acknowledged their prior caution around Nvidia had been "wrong," but said the upgrade was driven by signs of accelerated adoption of AI, pricing power and tight expense management. Meanwhile, analysts at investment bank Stifel were among those who maintained their hold rating on Nvidia's shares. They said they "continue to view NVDA as amongst the best positioned to benefit from accelerated AI-based investment," but expressed concerns about the stock's valuation. Its forward price-to-earnings ratio of 45-times is above the five-year average of 42-times, according to Stifel's calculations Thursday morning