The Nvidia stock forecast article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary

• I made a pre-earnings report buy recommendation for Nvidia last May. I gave it a price target of $320. Nvidia’s stock is now trading above $350.
• My gut instinct told me that its time to take profits on Nvidia now. Unfortunately, the predictive AI of I Know First still has a mega super bullish one-year forecast for Nvidia’s stock.
• I have no choice but to again endorse NVDA as a buy. My Nvidia stock forecast gives a new one-year price target of $388. 
• NVDA is relatively overvalued when compared to its peers. However, The Technical Indicators-driven AI prediction system of WalletInvestor has a one-year price target of $413.626 for NVDA.
• NVDA’S RSI of 100 already made it overbought but if you like momentum driven stocks, NVDA’s EMA trend is still hinting it remains a buy.

I correctly predicted last May 7 that Nvidia (NVDA) deserved a price target of $320. NVDA is now trading above $350. You can do profit taking like we did, or keep holding on to your NVDA shares. I was also accurate when I said the current pandemic would help NVDA beat 1QFY2021 estimates. The 1Q revenue of $3 billion is +38.7% year-over-year proof that Nvidia is pandemic-boosted. Nvidia’s feat of increasing its quarterly revenue (while there was strict quarantine and shuttered factories in China) is why its stock recently posted a new 52-week high of $357.27. 

My instinct says it is time to take profits on NVDA and wait for it to go below $300 to make a re-buy. Selling NVDA at above $350 is the easiest thing to do now. Unfortunately, the predictive AI of I Know First still has a mega super bullish one-year forecast score for NVDA. A stock only needs to get a trend score of 100 to get a clear buy signal. NVDA’s one-year forecast score from I Know First is 567.71. I Know First is extremely confident that Nvidia’s stock will trade higher within the next 12 months. 

The deep learning algorithm of I Know First’s stock prediction system is dismissing the increased overvaluation of NVDA. There’s a pandemic virus that has no vaccine yet, but NVDA still managed to post a YTD of price return of almost 50%. My belief is investors should take profits whenever a tech stock hits YTD return of 33% or more. Sadly, I’m surrendering and heeding the more powerful AI wisdom of I Know First. My Nvidia stock forecast renders the stock a buy and I’m giving it a new one-year price target of $388. This PT is reasonable.  

Nvidia Stock Forecast Is Fit

The technical indicators-driven AI algorithm of WalletInvestor has a one-year price target of $413.626 for NVDA. The highest one-year price target for NVDA at TipRanks is $430, and the average there is $379.58. 

The hyper optimism of I Know First and WalletInvestor for Nvidia’s stock is something we cannot ignore. Add this fact to NVDA’s positive monthly technical indicators and NVDA clearly remains as a strong buy. Some technical indicators say NVDA is Overbought, but the overall suggestion is that NVDA is still a buy. The moving averages (swing traders’ favorite momentum gauge) are all saying NVDA is a buy. 

Going forward, the current high valuation ratios of NVDA will only get higher. It is now relatively overvalued compared to its sector peers. However, investors invest in currently overvalued companies because they are performing better than their peers. Overvalued companies are also perceived as having the best future growth/profit potential. 

Seeking Alpha’s AI Quant Rating system gave NVDA a Value grade of F. Nvidia is very expensive to own right now and yet I Know First is still endorsing it as a strong buy. It is never too late, buy NVDA now before it even becomes more expensive.

Why NVDA Remains A Strong Buy

The increased gaming activities and the greater need for cloud computing for work-from-home during this pandemic will remain tailwinds for the rest of 2020. Nvidia’s stock might go above $380 after it announces another EPS and revenue beat for the upcoming Q2 FY2021 report. The probability of another earnings beat is very high. According to Jon Peddie Research, Nvidia managed to increase its GPU market share in Q1 2020. This achievement was in spite of the current pandemic. 

The super optimism of I Know First and WalletInvestor is also due to Nvidia’s fast-growing data center business. The chart below shows that the Data Center segment’s quarterly revenue almost doubled in just one year. Data Center product sales is now nearly as big as Nvidia’s core Gaming segment. NVDA is a buy because its Data Center revenue might soon eclipse the quarterly sales of the Gaming segment. Selling products to data center operators is a higher-margin endeavor than supplying GPUs to PC gamers and Switch console players. 

The growth momentum of the Data Center segment is well-secured. Half of this segment’s revenue now comes from hyperscalers like Google (GOOG), Amazon (AMZN), Microsoft (MSFT), and Baidu (BIDU). Those four customers are the world’s top cloud computing infrastructure service providers. They are all cash-rich. The data center products of Nvidia are very affordable to a hyperscaler like Google Cloud, Microsoft Azure, and Amazon Web Services. 

Conclusion

The inability of Advanced Micro Devices (AMD) to compete in the data center GPU business is why many investors remain bullish on NVDA. Yes, AMD is capable of producing cheaper alternatives to Nvidia’s server-grade GPU accelerators. Unfortunately for AMD, it will take years before its data center GPUs can gain industry support. Right now, Nvidia has a monopoly on data center GPUs. Even processor giant Intel (INTC) will struggle on its data center GPU ambition. The data center industry is too dependent (or addicted) to Nvidia’s GPU products. 

Intel and AMD can not simply catch up with Nvidia’s big lead in data center GPUs. The latest 7-nanometer Ampere A100 Graphics Processor from Nvidia boasts 20x better performance than its predecessor. NVDA is a strong buy because it really has no near or long-term competition in the lucrative data center GPU industry.

Past I Know First Success with Nvidia Stock Forecast

I Know First gave bullish Nvidia stock forecast on May 7, 2020. Our algorithm issued a bullish 30-day forecast for NVDA with a signal of 2.21and a predictability of 0.44. After 30 days, NVDA shares rose by 8.99% in line with the I Know First algorithm’s forecast.

Here at I Know First, our AI-based algorithm has modeled and predicted assets price movements worldwide for short-term and long-term time horizons, ranging from 3 days to a year. Since 2011, we have been providing stock predictions for 52 week low stocks, as well as Forex forecasts. Today, we are producing artificial intelligence market predictions for over 10,500 assets, providing daily gold outlook and AAPL price target. These forecasts generated by the best model of AI to use for trade prediction are used by institutional clients, as well as private investors and traders to identify the best investment opportunities in the market.

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Please note-for trading decisions use the most recent forecast