How Nvidia Stock Soared 150% in the First Half of 2024 -- and Why the Next Leg Up Could Come in August | The Motley Fool (2024)

Nvidia (NVDA) stock's stellar performance is being driven by powerful demand for the company's chips and other tech that enable artificial intelligence (AI) capabilities.

Nvidia (NVDA -6.62%) stock skyrocketed 150% in the first half of 2024. (Shares are up 165% through July 9.) That performance clinched the artificial intelligence (AI) chip leader the silver medal for best performers on the S&P 500 index. The gold medal went to Super Micro Computer, a server specialist that's also benefiting from surging adoption of AI.

For context, in the year's first half, the S&P 500 returned 15.3% and the tech-heavy Nasdaq Composite index returned 18.6%.

Before we dig in, it's helpful to know how Nvidia's revenue breaks down by market platform. Below is the revenue percentage breakdown for its most recent quarter (ended in late April). The company does not break out its earnings by platform, but it's safe to assume that its data center is its most profitable one.

  • Data center: 87%
  • Gaming: 10%
  • Professional visualization: 1.6%
  • Auto and robotics: 1.3%

Nvidia stock gained 36% in 2024 through mid-February, driven by momentum and strong demand for AI stocks

Nvidia stock had an especially great year in 2023. Last year, it soared 239% -- about 10 times the S&P 500's return. This performance was driven by voracious demand for the company's graphics processing units (GPUs) and related products and services that enable generative AI capabilities. This tech made a splash with consumers and business leaders alike following OpenAI's release of its ChatGPT chatbot in late 2022.

Momentum from last year and investors' continued strong appetites for AI stocks propelled Nvidia stock to a gain of 36% early in 2024 before its first major catalyst of the year. That catalyst was its release of quarterly results on Feb. 21.

Nvidia stock rose 17+% in the three market days after the Feb. 21 earnings release

On Feb. 21, Nvidia released its results for its fourth quarter of its fiscal year 2024, which ended Jan. 28. Shares soared 16.4% on the following day and 17.2% in the three market days following the release, driven by the quarter's results and guidance coming in better than Wall Street had been expecting.

In the quarter, Nvidia's revenue grew a whopping 265% year over year. Even better, adjusted earnings per share (EPS) surged 486%. The company's profits have been growing faster than its revenue, reflecting an increasing profit margin.

The quarter's growth was driven by the company's data center platform, its largest market platform and the one most benefiting from the growing adoption of AI. Its quarterly revenue skyrocketed 409% year over year. The gaming and professional visualization platforms also contributed to growth. Their revenue jumped 56% and 105%, respectively, from the prior year's period.

Nvidia stock gained 20% in the three market days after the May 22 earnings release

Nvidia stock was on fire for a few days following its release on May 22 of its super-strong results for the first quarter of its fiscal year 2025, which ended in late April. Better-than-expected quarterly results and guidance were two of three major catalysts, with the other being the company's announcement of a 10-for-1 stock split. (That split occurred on June 7.)

Nvidia stock rose 9.3% on the day following its earnings release and stock-split announcement, and tacked on 20% in the three market days following these events. And shares continued to rise through the end of the first half of the year, other than a minor pullback in mid-June.

In the fiscal first quarter, Nvidia's revenue and adjusted EPS rocketed 262% and 461%, respectively, year over year. Wall Street had been modeling for year-over-year growth of 243% and 413%, respectively.

The quarter's growth was driven by the data center platform, whose revenue surged 427% year over year. Nvidia's other three market platforms also grew year over year, with its gaming and professional visualization platforms showing particular strength. Their revenue jumped 18% and 45%, respectively.

Catalyst ahead: Earnings release likely coming in mid to late August

Nvidia hasn't yet announced a date for the release of its results for the fiscal second quarter (which ends in late July). However, investors can probably expect a date in mid or late August.

For fiscal Q2, management guided for revenue of $28 billion, which equates to growth of 107% year over year. It also guided (indirectly by providing a bunch of inputs) for adjusted EPS of $0.62, or 130% growth.

Wall Street's estimates are a bit higher -- $28.4 billion and $0.63 per share, respectively.

Exceeding Wall Street's estimates is not a sure thing. But I'm expecting the company to do what it nearly always does -- beat them by at least a solid margin. There's also no guarantee Nvidia stock will rise after the earnings release, but it has a good track record of doing so.

Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

How Nvidia Stock Soared 150% in the First Half of 2024 -- and Why the Next Leg Up Could Come in August | The Motley Fool (2024)

FAQs

How Nvidia Stock Soared 150% in the First Half of 2024 -- and Why the Next Leg Up Could Come in August | The Motley Fool? ›

The AI chip leader's stock's surge in the first half of 2024 was driven by two fantastic quarterly earnings releases and a stock split. The company's next earnings release should come in mid to late August.

What is the stock price forecast for Nvidia in 2024? ›

Nvidia Stock Price Forecast 2024-2025

Nvidia price started in 2024 at $49.22. Today, Nvidia traded at $125.83, so the price increased by 156% from the beginning of the year. The forecasted Nvidia price at the end of 2024 is $239 - and the year to year change +386%. The rise from today to year-end: +90%.

What is the stock price prediction for NVDA in 2025? ›

NVIDIA stock prediction for 1 year from now: $ 95.01 (-24.81%) NVIDIA stock forecast for 2025: $ 227.74 (80.23%) NVIDIA stock prediction for 2030: $ 4,330.91 (3,327.44%)

What is the future outlook for Nvidia stocks? ›

NVDA Stock Forecast FAQ

Based on analyst ratings, Nvidia's 12-month average price target is $140.85. Nvidia has 9.66% upside potential, based on the analysts' average price target. Nvidia has a consensus rating of Strong Buy which is based on 37 buy ratings, 4 hold ratings and 0 sell ratings.

What is the future growth rate of Nvidia? ›

Read: Nvidia faces an ever-higher bar. How Morgan Stanley says to play its stock. "We anticipate this 23% attach rate will grow to 35% in 2024 and will approach 100% by 2030," he wrote. "Assuming no server unit growth whatsoever, this implies a 22% GPU unit [compound annual growth rate] through 2030."

Could Nvidia top $1000 a share in 2026? ›

Nvidia stock — after splitting 10-for-1 early in June — could rise from $100 to $1,000 by 2026. This optimistic scenario assumes Nvidia keeps beating growth expectations and raising its forecasts — resulting in a 248% annual increase in the company's stock price over the next two years.

What if you invested $1000 in Nvidia 10 years ago? ›

An investment of $1,000 in Nvidia in June 2014 would be worth over $297,600 at Wednesday's close, according to calculations from Morningstar Direct. That's cumulative growth of 29,660%.

What will NVDA price target be in 5 years? ›

Multiplying the projected earnings with Nvidia's five-year average forward earnings multiple of 39 suggests that its stock price could hit $2,266 per share (barring any stock splits or other events) after five years. That would translate into a jump of 162% from current levels.

What is NVDA high price target? ›

$200.00

Is Nvidia a millionaire maker stock? ›

NASDAQ: NVDA

So, despite its meteoric rise since last year, the AI market still has plenty of room to run, with Nvidia well-positioned to keep seeing major gains and creating millionaires.

Should I buy or sell NVDA stock? ›

Overall, analysts continue to remain bullish about Nvidia stock, even as they've struggled to keep up with price-target hikes post-stock split. The consensus rating is a "Strong Buy,” with a mean target price of $139.41, indicating an upside potential of about 16.7% to current prices.

Who is selling Nvidia stock? ›

Nvidia's (NVDA) President and CEO, Jensen Huang, sold stock worth $30.6 billion earlier this week, according to a company filing. On July 15 and 16, Huang sold shares priced between $126.34 and $130.34 each. This stock sale was part of Huang's 10b5-1 trading plan, adopted on March 14, 2024.

What is the future of Nvidia in 2024? ›

In 2024, Nvidia has leapfrogged Alphabet and Amazon to stand as the world's third most valuable company, trailing only Apple ($3.30 trillion) and Microsoft ($3.25 trillion).

How much will Nvidia earn in 2024? ›

For fiscal 2024, revenue was up 126% to $60.9 billion. GAAP earnings per diluted share was $11.93, up 586% from a year ago. Non-GAAP earnings per diluted share was $12.96, up 288% from a year ago.

Is Nvidia a safe long-term investment? ›

Nvidia is in outstanding financial health. As of April 2024, the company held $31.4 billion in cash and investments, as compared with $9.7 billion in short-term and long-term debt. Semiconductor firms tend to hold large cash balances to help them navigate the cycles of the chip industry.

What will Nvidia stock be worth in 5 years? ›

Where Will NVIDIA Stock Be in 5 Years Prediction? In five years, NVIDIA's stock is expected to be worth at least $3,000. Some analysts believe it could be worth significantly more, depending on the company's performance in emerging markets like AI, autonomous driving, and the Internet of Things (IoT).

Will NVDA stock split in 2024? ›

Nvidia ($NVDA) stock will undergo its sixth stock split with shares trading at one-tenth the price starting June 10, 2024.

Is Nvidia a buy, sell, or hold? ›

Overall, analysts continue to remain bullish about Nvidia stock, even as they've struggled to keep up with price-target hikes post-stock split. The consensus rating is a "Strong Buy,” with a mean target price of $139.41, indicating an upside potential of about 16.7% to current prices.

What is the stock market prediction for 2024? ›

Overall, Yardeni Research forecasts S&P 500 operating earnings at $250 in 2024, up 12% vs 2023. He puts them at $270 in 2025 (up 8%) and $300 in 2026 (up 11.1%). These figures compare with analysts' consensus forecasts of $244.70 in 2024, $279.70 in 2025 and $314.80 in 2026.

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