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Nvidia ( NVDA ) mania is heating up ahead of Wednesday’s earnings report from the market enthusiast.
The company is “representative of the top stocks in America,” EMJ Capital founder and president Eric Jackson told Yahoo Finance editor-in-chief. Brian Sozzi on his Opening Bid podcast (listen below; video above).
Jackson reiterated his call that Nvidia shares could double within the next 12 months given its big lead in AI chip production.
“The investments [in AI] are just getting started,” Jackson added. “The need for these chips will still be there for the next two or three years.”
According to data from Yahoo Finance, Nvidia stock has risen more than 2,600% over the past five years, fueled by one impressive quarter after another as it took the top spot in advanced chips.
The company’s strong performance is expected to continue into the fiscal third quarter; sales and profits are each expected to rise 83% from a year ago. Wall Street remains bullish on its favorite stock.
Of the 63 sell-side analysts covering Nvidia, 59 rate the stock as a buy or strong buy, according to data from Yahoo Finance. The average price target is $160.38, about 13% above current levels.
“We view near-term risks as broadly balanced and are buyers of Nvidia heading into its fiscal third-quarter earnings report scheduled for Wednesday. Positive indicators of accelerated bookings at cloud service providers, an upward bias for hyperscale capital spending, as well as our view that near-term estimates will rise following the earnings call,” Evercore ISI analyst Mark Lipacis said in a client note on Monday.
Lipacis says that if Nvidia were to let investors down, it would come in the form of slowing revenue growth.
There’s been a whirlwind of activity around Nvidia lately.
In addition to achieving the world’s most valuable company status by knocking out Apple (AAPL) and Google (GOOG), Nvidia joined the Dow Jones Industrial Average on November 8. Former chip leader Intel (INTC) was kicked out.
“It’s good that Nvidia is now part of the mix,” Jackson said, noting this could encourage buying from retail investors.
One possible hitch is the Biden administration’s restrictions around sales to China and subsequent writedowns that were a “meaningful part of their quarterly profits,” Jackson said. “They had to reduce it to zero.”
President-elect Donald Trump could also remain steadfast on the chip issue and make good on his campaign promises in China.