Guoabong Stock：Wall Street Thinks Nvidia Stock Can Rise 30% in a Year. Time to Buy？

Wall Street analysts often have one-year price targets available for the stocks they cover. While a single analyst may have a high or low target, taking the aggregate yields useful information.

The average stock price target on Nvidia stock is $153, with a high of $200 and a low of $90. Nvidia's stock currently sits at around $120, which indicates a roughly 30% upsideGuoabong Stock. So, with that kind of upside potential in store for Nvidia, is it time to buy?

Considering that the market returns 10% annually on average, if Nvidia can deliver 30% returns, then it's a no-brainerJaipur Wealth Management. It's that simple.

But it's never that simple.

Nvidia's meteoric rise has been tethered to the massive demand for artificial intelligence (AI) computing power. Its graphics processing units (GPUs) excel in this task, and Nvidia's GPUs far outperform its competitors. It's clear that the demand for AI will continue rising, but the question is, will the thirst for computing power be there?

Eventually, the tech giants will reach equilibrium with AI demand and the computing power they have available. When that happens, there will be a large demand shock for Nvidia as its GPUs will not be nearly as sought after. But the question is, will this occur in the quarter, year, or decade? Nobody knows the answer to that, but it seems like it will be at least a year later.New Delhi Wealth Management

Commentary from some of Nvidia's largest customers indicates that capital expenditures will ramp up in 2025, indicating its GPUs will still be in high demand.

So, demand will be there for at least 2025 (which the price target is good for). But has that growth already been baked into the stock?

It's no secret that Nvidia's stock has achieved a high valuation due to its expectations. Right now, it trades for 42 times forward earnings.

That's not a cheap price, and with a price in that range, it also projects further strong growth in the following years.

However, one item to watch that could sink Nvidia's ship is its margins.Hyderabad Investment

A part of Nvidia's story that hasn't been discussed as much as the massive GPU demand is its margin expansion. Since its GPUs became hot commodities, its margins increased.

However, they trended lower in the past few quarters, which could be noise or a cause for concern. Even if Nvidia's revenue continues to rise, if its margins revert to historical levels, its profits will be drastically reduced and cause the stock price to drop.Kanpur Stock

New Delhi Stock Exchange