(Repost) Bloomberg -- Nvidia’s Red-Hot 2024 Start a Bright Spot as S&P 500 Eyes Record

(Transcribed with OpenAI Whisper)

Nvidia is red hot 2024 start a bright spot as S&P 500 eyes record. Nvidia Corporation is off to its strongest ever start to a year by one measure, keeping up a blistering rally that saw shares gain nearly 240% in 2023. The artificial intelligence darling has added roughly $128 billion in market capitalization after rising about 10% this month, an unprecedented gain in value in the first nine trading days of the year for the company. It's a boon for Nvidia bulls and signals that the AI trend still has momentum, at least for the firm viewed by many as one of the biggest early winners. Nvidia this year is easily outpacing the broader market and the rest of the so-called magnificent seven-megacap technology stocks. That's making it a major bright spot as the S&P 500 index has stalled near record highs amid questions around corporate profits and the timing of anticipated Federal Reserve interest rate cuts. From my standpoint, Nvidia is best of breed, said Shana Cecil, Chief Executive Officer of Bannery & Capital Management LLC, adding that it's dominant in its marketplace, has strong customer relationships and is growing fast. It's hard to find a lot of holes in the story. Read more, Nvidia is soaring again as three-day rally hits 11%, TechWatch. Nvidia had a better start on a percentage basis last year, to kick off its record rally. To be fair, those gains came after the stock lost half its value in 2022. For the next 12 months, analysts covering Nvidia have an average target price of almost $650, indicating roughly 19% upside for a company that now has a market capitalization greater than $1.3 trillion. The CES trade show this month solidified confidence for proponents of Nvidia shares. The company announced three new desktop graphics chips that will allow computer users to make better use of AI on personal machines. The shares also got a boost last week when Chief Financial Officer Colette Kress reaffirmed Chief Executive Officer Jensen Huang's assertion that the company expects it can continue to grow through calendar year 2025. Nvidia expressed a tone of confidence regarding end demand and pointed to supply increases each quarter this year, Piper Sandler and company analysts led by Harsh V. Kumar wrote in a note dated January 11, referring to a meeting with management at CES. To us, this indicates high conviction regarding backlog and order patterns throughout the 2024 calendar period. Nvidia is expected to release fourth-quarter earnings next month. Analysts project revenue rose some 230% in the period after a roughly 206% jump in the third quarter, data compiled by Bloomberg show.

Key Points: Nvidia's Strong Start in 2024

  1. Exceptional Performance: Nvidia Corporation has had an extraordinary start to 2024, experiencing its strongest beginning of a year by certain measures. This follows a remarkable rally in 2023, where its shares surged nearly 240%.

  2. Significant Market Cap Growth: In January 2024, Nvidia's market capitalization increased by about $128 billion, a record growth for the company in the first nine trading days of any year, with a 10% rise in stock value.

  3. Continued AI Momentum: Nvidia, a leading figure in artificial intelligence, continues to demonstrate the enduring momentum of the AI trend. The company is considered one of the major early beneficiaries of this sector.

  4. Outpacing Other Tech Giants: Nvidia is surpassing the broader market and other major technology stocks, often referred to as the "magnificent seven-megacap technology stocks," marking a significant bright spot as the S&P 500 index hovers near record highs.

  5. Investor and Analyst Confidence: Shana Cecil, CEO of Bannery & Capital Management LLC, acknowledges Nvidia's market dominance, strong customer relations, and rapid growth. Analysts covering Nvidia predict an average target price of nearly $650 for the next 12 months, implying around 19% potential upside.

  6. CES Trade Show Impact: At the CES trade show, Nvidia boosted investor confidence by announcing three new desktop graphics chips, enhancing AI utilization on personal computers.

  7. Management's Positive Outlook: Nvidia's CFO, Colette Kress, and CEO, Jensen Huang, have expressed optimism for growth through 2025, reinforcing confidence in demand and supply increases each quarter.

  8. Upcoming Earnings Report: Nvidia is expected to release its fourth-quarter earnings soon, with analysts projecting a revenue increase of about 230% for the period, following a 206% jump in the third quarter.

  9. Recovery from Previous Losses: It's noted that Nvidia had an even better start percentage-wise last year, following a 50% loss in stock value in 2022.

In summary, Nvidia's strong start to 2024 signals robust investor confidence and market dominance, particularly in the AI sector, outperforming broader market trends and other major tech companies. The company's recent announcements and management's positive outlook further solidify expectations for continued growth and profitability.

← Older Post Newer Post →