Nvidia Stock Forecast: Why You Should Buy More Shares of NVDA

motek 1This 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.


  • My October 3 buy recommendation for Nvidia’s stock is already a certified winner. The stock shot up from $181.31 to over $212 by November 18 closing date.
  • NVDA has exceeded my previous 120-day price target of $200. I am still endorsing it as a buy. I’m giving it a new 120-day PT of $220.
  • The Christmas shopping quarter will help Nvidia sell more gaming video cards. I expect Q4 F2020 to deliver Gaming segment revenue of  more than $1.8 billion.
  • Microsoft again selected Nvidia as its cloud AI GPU partner. The new Microsoft Azure NDv2 instance can scale up to hundreds of interconnected Nvidia Tensor Core GPUs.
  • As of of October 2019, Nvidia GPU accelerators boast over 97% usage by top 4 IaaS providers. This is consistent with May 2019’s share.

We should raise our bets on Nvidia (NVDA). I was correct in endorsing NVDA last October 3. From trading below $182 in early October, the stock has since shot up more than 10%. Nvidia’s excellent Q3 F2020 report definitely helped the stock beat my previous (October 3) 120-day price target of $200 for NVDA. I am giving it a new 120-day PT of $220.

Nvidia Stock Forecast
(Source: Seeking Alpha)

My optimism on further upside for NVDA is still due to its leadership in gaming. Gaming contributes $34.3 billion/year to the global computer graphics hardware business. This contribution will hit $37.69 billion by 2022. Nvidia is therefore a leader in a growing (not declining) industry.

Nvidia Stock Forecast
(Source: Statista)

I expect Nvidia to beat its own Q4 revenue guidance of $2.95 billion (below Wall Street’s expectation of $3.06 billion). The Christmas shopping quarter is usually the peak season for buying new or upgrade their gaming video cards and computers. Many people will get their 13th month pay and Christmas bonuses. The increased purchasing power of gamers during November and December consistently boost the fourth quarter topline of Nvidia.

Trust the Q4 Enhancement to Gaming Segment

Gaming remains Nvidia’s biggest profit and revenue growth driver. The Black Friday and Christmas sales events boost will help the Gaming segment deliver Q4 FY20 revenue of more than $1.8 billion. Q3 saw Gaming revenue of $1.659 billion, up 26% quarter-over-quarter.  You should raise your bets on NVDA because its consumer graphic accelerator cards still dominate Amazon’s best-seller list.

Nvidia Stock Forecast
(Source: Nvidia)

My $1.8 billion projection for Gaming segment’s Q4 is realistic. Nvidia has released its equalizer to the budget and mid-range GPUs of Advanced Micro Devices (AMD). The $229.99 GeForce GTX 1660 Super is available at partner retailers since October 29. It is even available here in the Philippines. The 50% performance increase over the older GTX 1060 should compel many gamers and creative professionals to purchase the GTX 1660 Super.

(Source: Nvidia)

The cheaper GTX 1650 Super will be available on November 22.  It might retail below $180. Nvidia’s willingness to disrupt the low-cost video card products of AMD convinced me that Nvidia’s gaming segment will have a Q4 revenue of more than $1.8 billion.

Industy Bias For Nvidia Data Center GPU Accelerators

Nvidia’s pseudo-monopoly on data center GPU accelerators is another massive tailwind. Tesla GPUs tout a market share of more than 97% among the world’s top 4 IaaS (Infrastructure-as-a-Service) companies. AMD’s Radeon Instinct data center GPU has been around for more than 1 year and yet Nvidia continues to enjoy more than 97% share of IaaS GPU accelerator market.

(Source: Forbes/Paul Teich)

As of October 2019, Nvidia still has more than 97% share of the market for dedicated GPU accelerators for data centers.

The top 4 cloud computing infrastructure companies are captured customers of Nvidia Tesla GPUs. The latest Tesla v100 now accounts for more than 29% of Amazon (AMZN) Web Services dedicated accelerator instances.  At Microsoft (MSFT), V100 accounts for 26%.

The GCP at the chart below refers to Google (GOOGL) Cloud Platform.

(Source: Liftr Cloud Insights)

Microsoft again picked Nvidia as its GPU partner for the new Azure NDv2 instance for Artificial Intelligence and High Performance computing. The Azure NDv2 instance can use up to 800 interconnected Tesla V100 Tensor Core GPUs. Microsoft is likely paying top dollars for every Tesla V100 it buys from Nvidia. Even with bulk purchase discounts, I suspect Nvidia will still charge more than $8,000 for each flagship version of Tesla V100.

The expensive price tags of Nvidia data center GPUs is why Microsoft charges $8.28/hour for  the first-generation Azure ND instance (designed for AI and deep learning training and inference) with 4 units of the older Tesla P40 GPUs. The higher price tag of the Tesla V100 will mean Azure NDv2 will be more expensive. Please refer to the chart below.

Nvidia Stock Forecast
(Source: The Next Platform)

There’s a big chance that AWS, GPU, and Alibaba will also buy more Tesla V100. They will need them to equalize Azure NDv2. The growing adoption of the Tesla V100 by public cloud companies should help Nvidia’s Data Center segment produce Q4 revenue of $750 million or higher. This will be not that far from Q3’s $726 million.

The other tailwind for Nvidia’s Data Center segment is that Tesla GPUs will now be compatible with ARM-based server processors. This will cater to data center operators with budget constraints. The better energy efficiency and lower costs of ARM-based server processors means they can slowly prosper against Intel’s (INTC) Xeon processors.  

Nvidia’s recent embrace of ARM-based server processors is likely influenced by ARM Holding’s new Neoverse N1 (for servers) and Neoverse E1 (for 5G routers/modems) processor designs. Tesla V100 GPUs can complement Neoverse N1’s 2x CPU vector processing performance improvement over the older Cortex-A72 ARM processor design.

(Source: ARM Holdings)


My $220 PT for NVDA is reasonable. This figure is still lower than the average PT of $229.44 at TipRanks. BofA/Merrill Lynch analyst Vivek Arya called NVDA a buy five days ago. Arya raised his PT to $275. Jefferies analyst Mark Lipacis recently raised his NVDA PT from $210 to $250. SunTrust Banks also raised its PT from $216 to $240. Equity analyst Ruben Roy from The Benchmark Company also raised his PT from $210 to $240. The point is that NVDA is now a market darling. It should be in your investment bag.

Nvidia Stock Forecast
(Source: TipRanks)

A check on I Know First also revealed that its stock picking AI has a super bullish one-year stock forecast score of 682.12 for Nvidia’s shares. I Know First has a high accuracy in predicting the future market trend of NVDA. Its predictability score on the 12-month trend pattern of NVDA is 0.84. If nothing catastrophic happens, one year from now NVDA might deliver Vivek Arya’s 1 year price target of $275.

Nvidia Stock Forecast

How to interpret this diagram.

Past Success With Nvidia Stock Forecast

I Know First has been bullish on NVDA’s shares in past forecasts. On December 27, 2018, the I Know First algorithm issued a bullish forecast for Nvidia stock price. The algorithm successfully forecasted the movement of the NVDA. Until today, Nvidia stock price have risen by 59.49% in line with the I Know First algorithm’s forecast. See chart below.

Nvidia Stock Forecast

This bullish NVDA stock prediction was sent to the current I Know First subscribers on December 27, 2018.

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