Nvidia’s Strong Year

Malik’s bullish case suggests that the stock’s rally could reach $600 per share, a 32% increase from the previous closing price. This would be more than four times higher than where the stock ended in 2022. While Malik’s price target and bull case are higher than the average analyst’s price target of $479.22, they are still below the highest price target on Wall Street of $767 per share, according to Refinitiv.

Nvidia Dominates the AI Market

Malik considers Nvidia a clear winner in the AI space, with more than 90% market share in AI acceleration. The market for AI acceleration is expected to be valued around $150 billion in 2027. He also believes Nvidia will maintain a significant advantage over Advanced Micro Devices in the AI market. In terms of software, competitors will need several generations to catch up to Nvidia’s developments. Additionally, Nvidia remains a leader in graphics processing units on the accelerator and system levels.

Positive Outlook for Earnings

In addition to raising the price target, Malik has also increased his outlook for Nvidia’s earnings per share (EPS) in the upcoming years. He now anticipates EPS to be 6% higher than previously expected for the 2024 fiscal year. For 2025 and 2026, he projects EPS to be 38% and 30% higher, respectively.

Potential Risks

Despite the optimistic outlook, Malik acknowledges that stock performance could be impacted by increased gaming competition, slower-than-expected adoption of new technology, difficulties in the data center or auto markets, or any negative effects of crypto-mining on gaming sales. He believes that the risks of these factors could affect Nvidia’s performance in the near to long term.

“We continue to see favorable risk-reward on accelerating Y/Y data center sales through the year with China ban, slower macro impact on gaming demand, and competition as key near- to long-term downside risks,” Malik said.

— HaberTusba’s Michael Bloom contributed to this report.