Nvidia Stock Forecast – what to expect over the next 5 years?

NVIDIA Corporation (NASDAQ: NVDA) has surpassed Wallstreet’s expectations of the past 12 months, gaining 44.66%. The tech giant manufactures Graphic Processing Units (GPU) for Gaming and specialised markets and is seeing a surge in demand in recent quarters. However, more recently Nvidia stock has experienced higher levels of volatility, alongside majority of the tech market. With the addition volatility at play, investors are now asking if NVDA can maintain its 2020 momentum over the next 5 years. This article will breakdown the Nvidia stock forecast.

Wallstreet analyst sees $4 Billion in software revenue by 2025

Evercore ISI analyst C.J. Muse recently raised the firm’s price target to $250 a share. The target suggests an upside of 25.6%, reaffirming the companies outlook for the next 12 months. However the analyst sees strength in Nvidia’s robust software ecosystem and emerging monetization channels. Muse believes the company could see $4 Billion in incremental software revenues by 2025 according to theFly.

The $4 Billion revenue target highlights key contributions from Nvidia’s AI Enterprise platform, Mercedes-Benz partnership, Omniverse, GeForce Now, and eventually Base Command and Fleet Command.

Overwhelming majority of analysts see upside in Nvidia stock

Evercore ISI are not the only institution to call bullish on Nvidia stock, with analysts from UBS, Wells Fargo and Rosenblatt securities all raising targets for 2022. Wells Fargo analyst Aaron Rakers raised the banks target to $245 a share. The analyst illustrated Nvidia stock as his “most compelling long-term secular growth story”. However, the analyst does expect below-street 2023 estimates. The analyst noted the increasing competition and the maturing GeForce RTX 30xx-series cycle as key components of his 2023 modelling thesis.

Another 2025 forecast from Wallstreet was made earlier this year. Analyst Vivek Arya from the second largest banking institution in the USA, Bank of America sees the possibility of Nvidia maintaining a 20% sales growth through to 2025.


Nvidia continues to outperform revenue expectations

in 2021, Nvidia has driven immense revenue growth across the board, highlighting the companies dominance within its industry. In the first quarter of 2021, Nvidia generated above concensus revenue of $5.66 billion, which was 84 percent higher year on year. The key drivers of this revenue growth was success in the Gaming and Data Center sector, growing 106% YOY and 79% YOY respectively.

Furthermore, the company backed up its Q1 results with an even stronger Q2 sales performance. In the second quarter, Nvidia posted record revenue of $6.51 billion which was a 68% improvement year-on-year.

With no surprise to shareholders, the companies strong Gaming and Data markets have delivered strong returns. Nvidia’s gaming market generated $3.06 Billion in Q2, which beat the previous quarterly record by 10.8%. The companies gaming market growth was primarily due to both GeForce graphics cards sales as well as game-console SOCs.

In terms of the companies Data centre revenue, the company also saw record breaking revenue of $2.37 billion in Q2. The Data Center revenue grew 16% from the previous quarter and 35% year-on-year. The CFO, Colette Kress noted that this growth was “led by the ramp of NVIDIA Ampere architecture products into vertical industries and hyperscale customers.”

Revenue outlook – Nvidia Stock Forecast

The average revenue forecast from Wallstreet analysts for the FY year of 2022 estimate revenue to hit $25.75 Billion according Yahoo Finance data. This illustrates a forecasted 49.30% growth in revenue YOY, which is incredibly strong for a large blue chip stock.

In addition, analysts expect the company to generate upwards of $20.02 Billion in the FY year of 2023. From the analyst data above, we can conclude that Wallstreet remains Bullish on the companies revenue prospects over the next two years.

The Bottom Line – Nvidia stock forecast

In summary, Nvidia continues to drive a strong bullish sentiment across Wallstreet. This is due to the companies aggressive revenue growth and a surplus in institutional ownership.

However, there is no reward without risk and we have seen NVDA experience higher than usual levels of volatility. Therefore investors may need to price in the additional volatility into their risk strategy.

Written by Tyger Fitzpatrick

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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