NVIDIA Analysts Lift Targets: What It Means for the Stock Price

NVIDIA (NASDAQ: NVDA) analysts are raising their targets, and the implications are profound for its stock price, the tech sector and the S&P 500. With the tech sector expected to lead the index in growth, and NVIDIA the most significant component of the tech sector and the broader index, expectations for both are growing.

The risk is that, with analysts' trends as bullish as they are, the index will fail to impress, leaving its stock and the broad market in a correction.

NVIDIA Analysts Are Driving High Expectations for Results and Stock Prices

MarketBeat data shows four analyst updates in the first two weeks of October, including two price-target increases, one target maintained, and one target reiterated above the consensus forecast. The critical detail is that these updates align with the trends, including increased coverage, a robust support base (46 analysts covering the stock), and a rapid increase in the consensus target.

Up 50% in the preceding 12 months, NVIDIA’s consensus target rose by 20% mid-September to mid-October, with most targets in the mid-$200 range and a second pegged at $300. The $300 high, echoed by Weiss Ratings, forecasts a 60% upside for this market that the upcoming earnings release could unleash.

The earnings forecast revision trends are also very bullish. Nearly 95% of analysts issuing earnings forecasts increased their targets during the quarter, forecasting a 55% revenue gain as of mid-October.

This is up more than 500 basis points in under 90 days, providing significant lift to market sentiment. The risk is that recent revisions, which have pushed the high end of the range to 60% or more revenue growth, mean outperformance will need to be significant to keep analysts raising their price targets. 

However, the deal volume suggests otherwise. This indicates that NVIDIA will likely outperform its consensus estimates by mid-October and provide solid guidance to sustain the sentiment trend.

Morgan Stanley has raised its price target to $210, noting that NVIDIA is capturing more share in cloud-focused capital expenditure as companies move from CPU to GPU-based computing. Future demand is driven by the expanding range of transformative AI applications. 

In the Event the NVIDIA Price Corrects: Buy the Dip

The institutional trends and valuation metrics suggest that, if NVIDIA’s stock price enters a correction, it will not fall far or linger at lower levels for long. The stock trades at a premium in 2025—approximately 40x its earnings—compared to only 23x for the average S&P 500 company, reflecting its robust growth outlook.

The valuation declines significantly compared to the forward outlook. The institutions are purchasing; they have been buying consistently throughout the year at a rate exceeding $2 for every $1 sold.

Analysts' forecasts and outperformance aside, the company is expected to grow revenue by another 55% in Q3 and sustain a high double-digit growth pace over the next decade.

In this scenario, the valuation falls to only 10x earnings by 2035, suggesting that it could rise by 100% to 200% over the next decade at a minimum. If NVIDIA outperforms in Q3 and provides favorable guidance, the long-term forecast as of mid-October could be too cautious. 

NVIDIA Poised to Make a Big Move

NVIDIA is in an uptrend and poised to make a significant movement, but the setup is questionable. While the trend is positive, recent activity shows resistance at current highs, greatly diminishing momentum.

A less-than-fantastic report could trigger a pullback, potentially shaving $10 to $20 off the stock’s price. The critical support level is near $167; a move below it opens the door to a more significant correction. 

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The article "NVIDIA Analysts Lift Targets: What It Means for the Stock Price" first appeared on MarketBeat.