Nvidia investors are experiencing a forgettable year right now. Shares of the giant have gone down a lot in 2022 for many reasons. From the Fed’s hawkish stance and Nvidia’s missed acquisition of Arm and the market not liking Nvidia’s new quarterly results, a lot of things went on that has harmed investors’ confidence. However, some analysts think Nvidia could now hand over impressive upside.
Nvidia stock has a target of $400 at the top end, which would mean 70% upside from its ending on February 22. The average estimate is around $346, which would be a 48% boost. With catalysts like the metaverse coming into play, it would not be surprising to view this tech stock going higher in the future.
Nvidia is getting an increase from the metaverse
Nvidia put out great results for Q4 of fiscal 2022 on February 16, with revenue going up 53% y/y to $7.6 billion and adjusted earnings increasing 69% to $1.32 a share. The data center business had a big role in this huge growth, and accounted for around 43% of the firm’s revenue.
Nvidia’s data center revenue went up 71% year-over-year, and this terrific growth was in part because of Meta Platforms. Which last month announced the creation of the AI Research SuperCluster (RSC), which it said would would be the world’s top AI supercomputer when it is done by sometime this year. Meta Platforms is making use of Nvidia’s GPUs to power its supercomputer.
Meta Platforms thinks “the work being done with RSC will lead to building new technologies for the next computing platform — which they call the metaverse, where AI applications will have an important role.” The metaverse allows people to interact in a virtual world.
The supercomputer is now being powered by 6,000 A100 data center graphics card. Nvidia says that this RSC will eventually use 16,000 A100 GPUs to give a bigger increase in AI output.
Nvidia stock is not cheap even with its pullback in 2022. But the company’s rich valuation looks to be justified since its outstanding growth is clocking quarter after quarter. Also, Nvidia’s stock is available at a big discount from 2021, when it was going for around 30.6 times sales and up to 90.6 times earnings.