There's no getting around it: Nvidia (NVDA 0.80%) has been a rock star among the Wall Street set since the artificial intelligence (AI) revolution kicked off just over a year ago. In fact, since the beginning of 2023, shares of the semiconductor company have soared nearly 441%.
One Wall Street analyst believes there's still much more to come.
NASDAQ: NVDA
Key Data Points
Profiting from the AI boom
Rosenblatt analyst Hans Mosesmann, the self-professed "most bullish analyst on Nvidia," boosted his price target to $1,400 while maintaining a buy rating on the stock. That represents potential gains for investors of 78% from where the shares traded as of market close on Friday.
The analyst cites Nvidia's fiscal 2024 fourth-quarter results, released just last week, as the catalyst for his bullish call. The semiconductor specialist delivered triple-digit, year-over-year growth for the third consecutive quarter, and its guidance suggested more of the same.
The analyst points out that "Nvidia remains sold out for the [fiscal year]." Furthermore, Mosesmann suggests there's likely much more to come, saying, "We are in the very early innings of what we call the Mother of All Cycles."
What the future holds for Nvidia
Most market commentators agree with the analyst's assertion that we're still we're still in the early innings when it comes to the adoption of generative AI. If that's the case -- and I believe that it is -- Nvidia has two advantages that could drive its stock even higher.
First, Nvidia has a virtual monopoly on the graphics processing units (GPUs) used in the data center market -- where most AI processing takes place -- with a market share estimated at 95%. Second, Nvidia made a name for itself as the go-to for machine learning -- an earlier branch of AI -- with a market share of 95% in that market.
To be clear, the days of easy triple-digit comps will soon be in the rearview mirror, but AI is just getting started. And with a price/earnings-to-growth ratio (PEG ratio) of less than 1 -- the standard for an undervalued stock -- Nvidia is still remarkably cheap compared to its opportunity.
