Nvidia is reaching new highs after the chipmaker beat Wall Street’s estimates by a wide margin in two consecutive quarters. The company’s stock closed at a record on Wednesday, with many analysts expecting a further rise in the near future.
The shares of Nvidia reached its all-time high price of $502.66 per share last week when the company shared its impressive second-quarter earnings report. The numbers included $6.7 billion in net income, which represented an astonishing 422% increase compared to the same period in 2022.
The reason for the most recent Nvidia stock surge is that the company struck an Artificial Intelligence-centered deal with Google. As a result, Google Cloud users will receive expanded access to the services powered by Nvidia graphics processing units (GPUs), among other things.
Despite the surging price of Nvidia stock, Melius Research’s analyst Ben Reitzes believes the company’s shares are actually cheap at the moment. In a recent note to clients, Reitzes set a target price of $730 compared to Wednesday’s closing price of $492.64.
“We cover a diverse basket of AI-related stocks, and Nvidia is now trading at only a modest premium to the group on a PE basis,” Reitzes wrote. “Dare we say Nvidia is now cheap?”
