Will Nvidia Be a $2 Trillion Company in 2024?
From Nasdaq:
Nvidia is closing in on a $2 trillion market cap
Right now, only two U.S. companies have market caps greater than $2 trillion, Microsoft and Apple. As of Jan. 31, Nvidia is the fifth-largest U.S. company (sixth-largest globally) with a $1.5 trillion market cap. For Nvidia to reach a $2 trillion valuation in 2024, it would need to grow 33% from its current stock price.
AI is driving Nvidia’s growth
Nvidia’s GPUs are essential for AI and responsible for its booming financial situation. The company posted year-over-year revenue growth of 101% and 206% in the second and third quarters of fiscal year 2024 and expects to reach $20 billion in revenue, indicating 231% growth year over year by the fourth quarter.
Nvidia’s valuation is driven by speculation
Nvidia’s stock currently trades at 83 times trailing and 51 times forward earnings. If Nvidia’s stock price rose an additional 33%, these valuations would also rise to 110 times trailing and 68 times forward earnings. However, by 2025, Nvidia’s forward price-to-earnings ratio is forecasted to be 31 times earnings.
Nvidia stock could retain growth
Nvidia’s Q4 guidance will provide key information for investors. A strong quarter with impressive guidance is expected due to the ongoing AI demand. However, Nvidia’s future growth is uncertain beyond 2023
To buy or not to buy?
Investors are advised to wait for Nvidia’s Q4 guidance before making a decision. Stock Advisor recently identified 10 best stocks to buy, none of which were Nvidia, pointing to the uncertainty surrounding its future growth.