Strong growth in several massive markets will help drive NVIDIA's (NVDA 1.50%) share price to $500.
So says Rosenblatt Securities analyst Hans Mosesmann. On Friday, Mosesmann reiterated his buy rating on NVIDIA's stock and boosted his target price from $400 to $500. His new price forecast represents potential gains for investors of roughly 20%, based on the chipmaker's current price near $418.
Mosesmann says NVIDIA's gaming-related sales will be fueled in part by the upcoming launch of new consoles by Microsoft and Sony. He also expects NVIDIA's data center revenue to be boosted by strong sales of its A100 graphics processing units (GPUs) and a "secular shift" to GPU-accelerated computing.
Will NVIDIA's stock hit $500?
Yes, I believe it will -- and perhaps sooner than many investors expect.
Mosesmann wisely highlights two powerful growth drivers for NVIDIA: video games and data centers. Video game sales are booming during the coronavirus pandemic, as social distancing guidelines and fears of getting sick are driving more people to choose home-based forms of entertainment. Meanwhile, sales of GPUs designed for use in data centers are being driven in part by demand from the cloud computing titans, such as Alphabet's Google Cloud.
With these large and fast-growing markets fueling its expansion, NVIDIA's stock appears destined to reach $500 -- and perhaps much higher -- in the year ahead.