Shares of the graphics processing unit (GPU) and artificial intelligence (AI) leader have returned 52.2% in 2019 through Nov. 1, outpacing the broader market's 24.4% return. This long-term winning tech stock is coming back strong after falling off a cliff late last year due largely to the company's struggles in its gaming business along with a slowdown in its data center segment. Shares are now "only" about 28% off their all-time closing high, set on Oct. 1, 2018.
We can probably attribute NVIDIA stock's robust performance last month largely to a pair of stock price target hikes by Wall Street firms. Analysts have recently been getting progressively more enthusiastic about the company's prospects.
On Oct. 7, the analyst at RBC Capital who covers the stock reiterated his/her outperform rating and increased the stock price target to $217, up from $190. Then on Oct. 15, Bank of America/Merrill Lynch reiterated its buy rating and upped its stock price target to $250, from $225. For some context, NVIDIA stock closed at $202.59 on Friday, Nov. 1.
Investors who bought on the market's overreaction to NVIDIA's previously mentioned struggles -- a share of the stock could be had for just about $127 on Christmas Eve, 2018 -- have been amply rewarded.
Investors should be getting material news soon, as NVIDIA is slated to report its fiscal third-quarter 2020 results on Thursday, Nov. 14, after the market closes.
Wall Street is looking for adjusted earnings per share of $1.58 on revenue of $2.92 billion, representing declines of 14.1% and 8.2%, respectively, year over year. Analysts are projecting that the company will return to growth mode on both the top and bottom lines starting next quarter.