Nvidia (NVDA +1.67%) is knocking on the door of a 170% year-to-date gain. And that door could swing wide open at any time.
Quite a few analysts believe that there's a lot more room to run. Here's how much higher Wall Street thinks Nvidia stock will soar.
NASDAQ: NVDA
Key Data Points
Awestruck analysts
Nvidia's first-quarter update blew analysts away. After the company projected Q2 revenue of $11 billion, Wedbush's Dan Ives said that Nvidia "delivered guidance for the ages."
Jensen Huang, Nvidia's CEO, stated that his company could be having its "iPhone moment," a reference to Apple's massive success with its smartphone. And Wall Street seems to agree.
The average analysts' 12-month price target for Nvidia reflects an upside potential of more than 14%. That's peanuts compared to the stock's gain so far this year. However, it could mean that investors still aren't too late to the party with Nvidia if analysts are right.
One firm is especially bullish about the stock. Elazar Advisors set a price target of $644.80 for Nvidia. That's nearly 65% above the current share price.
Some skepticism
There are skeptics, though, who aren't convinced that Nvidia can fly even higher. Charles Schwab's Equity Ratings Report recently slapped an "underperform" (or "sell") rating on the stock.
Schwab gave Nvidia grades of "D" on quality, stability, and valuation. It assigned a grade of "F" for growth prospects. The firm also stated that its outlook was for the stock to experience "above average price volatility."
Deutsche Bank analyst Ross Seymore isn't as negative as Schwab is about Nvidia. However, he views the stock as one to hold rather than buy right now. Seymore's 12-month price target is a little below Nvidia's current price. He did admit, though, that Deutsche Bank "see[s] little that could diminish investor optimism and recommend continuing to enjoy the ride."
A former champion of Nvidia who isn't on Wall Street also now questions the stock's valuation. Ark Invest CEO Cathie Wood tweeted last week that Nvidia is "priced ahead of the curve." But her comment came after Ark's ETFs sold a big chunk of their positions in the stock in early January 2023 before its huge run.
Better picks?
Are there any AI stocks that Wall Street likes even better than Nvidia? Yes, but you have to look hard for them.
The consensus 12-month price target for Soundhound AI (SOUN +5.07%) is a whopping 77% higher than its current price. Soundhound develops voice AI applications used by multiple industries, including automakers and restaurants.
NASDAQ: SOUN
Key Data Points
This stock isn't widely followed on Wall Street. However, of the three analysts covering Soundhound who were surveyed by Refinitiv in May, all rated the stock as either a "buy" or "strong buy."
Wood tweeted that Ark Invest "sees dozens of AI winners." There's one that she trumpets the most -- Tesla. She stated that Tesla "is the most obvious beneficiary of the recent breakthroughs in AI." Wood pointed out that the stock trades at 6x revenue while the total addressable market in "autonomous mobility" could be between $8 trillion and $10 trillion by 2030.
Of course, investors don't have to follow the lead of Wall Street analysts or well-known investment managers. Several other stocks are likely to be big winners from the AI boom over the long run.
