Nvidia Stock Is Writing Another Chapter in Its Illustrious Story

Any conversation regarding 2019’s large-cap chip leaders must include Nvidia (NASDAQ:NVDA), NVIDIA stock is up 63.48% year-to-date. That compares nicely with the 33.57% returned by the Nasdaq-100 Index.

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Nvidia stock isn’t the best-performing chip name, and it’s trailing rival AMD (NASDAQ:AMD) by a wide margin, but those facts don’t detract from the Nvidia story. Nvidia stock has recently been showing signs of strength, gaining 7.55% in November while outperforming the PHLX Semiconductor Index by nearly 300 basis points last month.

Nvidia stock has been on a torrid pace in the fourth quarter, surging 30.68%, issuing a fair amount of regret to third-quarter sellers of the name, including a certain former vice president. With Wall Street turning increasingly bullish on Nvidia stock, near-term regret could come in the form of assuming the stock has already run up too much or that it’s too expensive compared to other chip stocks.

Last week, Morgan Stanley semiconductor analyst Joseph Moore upgraded shares of Nvidia to “outperform” from “equal weight” while boosting his price target on the name to $259 from $217. That implies upside of more than 19% from the Friday, Nov. 29 close of just under $217.

“Both gaming and data center fell short of expectations over the course of 2019, and we were surprised at how well the stock was doing in light of that,” said Moore in a recent note to clients.

He continued:

“But the stock has not meaningfully outperformed the robust semiconductor group, and as we look into 2020, we see catalysts for Nvidia’s growth accelerating on nearly every vector, even in what we expect will be a tough semiconductor environment — ray tracing software support should generate more gamer enthusiasm in gaming products, and new data center workloads around conversational AI should lead to another leg of data center growth.”

Other Catalysts for Nvidia

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