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NVIDIA (Nasdaq: NVDA) had an up-and-down week. It started the week with strong gains after a series of upgrades and positive notes from Wall Street but saw a steep 5.6% sell-off on Thursday after investors rotated out of technology following a soft CPI report from the Federal Reserve.
So, we wanted to highlight the most essential news NVIDIA investors should key in on this week: Wall Street is beginning to put some numbers behind how NVIDIA shares could hit $200 by the end of 2024.
Need to Know News on NVIDIA This Week at a Glance
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- Right now, leading Magnificent 7 stocks are trading for around 30X to 35X forward earnings multiples. NVIDIA is also in this range.
- Wall Street banks are starting to get feedback that blowout GB200 sales could fuel NVIDIA's 2025 earnings per share to up to $5. At this level, NVIDIA could trade for north of $200 per share.
Leading AI Stocks are Trading for Similar Multiples
I've published several articles recently highlighting how leading Magnificent 7 companies in AI are being valued relatively uniformly by investors. NVIDIA, Amazon, Apple, and Microsoft are all currently trading for between 30X to 35X 2025 earnings (forward earnings).
This number is important because it can be a guide post what price NVIDIA shares could trade for depending on next year's earnings estimates. For example, if NVIDIA is expected to post an EPS next year of $4 per share, you could multiply that to get a lower-end value of $120 per share ($4 EPS X 30X Forward P/E) or a higher-end value of $140 per share ($4 EPS X 35X Forward P/E).
It's not surprising that in recent weeks NVIDIA has begun trading in this range - around $120 to $140 per share - as Wall Street estimates currently call for NVIDIA to make about $3.68 per share next year and those estimates have been on the rise.
Wall Street Reveals How NVIDIA Could Surprise
Yet, another area I've been repeatedly calling attention to is that NVIDIA will launch its next-generation Blackwell chips in servers that can cost more than $3 million each. These servers - known as the GB200 - combine 72 NVIDIA B200 GPUs, processors, and networking technology all in one package.
Since AI is still in an arm's race period that hasn't let up, companies are lining up to buy GB200 systems. Reports out of Taiwan have NVIDIA readying to produce more than 40,000 GB200 systems, which could produce $75 billion-plus in profits just from this system alone. Keep in mind, that's revenue on top of selling their actual next-generation B200 chips which will come after the GB200's release.
This week, Wall Street started catching up to the reality of just how much a hyper-successful GB200 launch could add to NVIDIA's earnings next year.
- Keybanc released a new forecast that strong GB200 demand would lead NVIDIA to $200 billion in Data Center sales next year. That number compares to the consensus Wall Street estimate of $140 billion in Data Center sales.
- UBS also issued a research note on GB200 sales pushing NVIDIA expectations higher. They revised their EPS estimate next year up to $4.95 per share. UBS previously believed NVIDIA would book an EPS of $4.22 in calendar 2025, so raising their price target to $4.95 is a 15% boost in profit expectations for next year.
NVIDIA at $5 EPS Paints a Path to Potentially Hit $200 Per Share
Running the math, you can see how NVIDIA at $4.95 in EPS at a 35X earnings multiple gets NVIDIA to about $173 per share. However, remember that the current multiple leading Magnificent 7 tech companies are being valued at is 35X forward earnings.
From that standpoint, consensus Wall Street estimates have NVIDIA growing EPS by another 16% in calendar 2026. That means that if consensus estimates for NVIDIA's earnings grow to $5 per share next year, by the start of next year 2026 EPS estimates would likely grow to around $5.80 per share. Running the numbers again, we have $5.80 in 2026 EPS X 35X forward earnings, which gets NVIDIA to $203 per share.
Risks to NVIDIA Beyond 2024
Of course, while I've laid out how insatiable GB200 demand could get NVIDIA to $200 per share by the end of 2024, keep in mind that Wall Street will immediately be looking for signs of how demand for the next generation beyond Blackwell is lining up into 2025.
As I've noted in the past, while demand for Blackwell looks locked in to exceed expectations, the greatest risk facing NVIDIA is that large cloud providers begin cutting back orders in the second half of 2025. So if you're looking to diversify your portfolio into leading tech companies that could profit from AI in ways that are different than NVIDIA (AI software, picks and shovels plays selling to NVIDIA and rivals, etc.), make sure to grab a copy of our "The Next NVIDIA" report .
There are dozens of companies that could see massive returns from the growth of AI, so if you're not seeing the entire landscape you're doing yourself a disservice. This report is complimentary but available exclusively from 24/7 Wall Street, so don't wait to check it out!
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