Shares of the graphics chip specialist got a boost from a Wall Street firm’s long-term growth projections, along with general market dynamics.
Shares of tech giant Nvidia ( NVDA -4.50% ) gained 11.9% in March, according to data from S&P Global Market Intelligence. For context, the S&P 500 and Nasdaq Composite returned 3.7% and 3.5%, respectively, last month. The latter index is the better benchmark for Nvidia because it has a heavier concentration of technology stocks.
In addition to overall market dynamics, there was a company-specific catalyst for Nvidia stock’s March outperformance: a very bullish note from a Wall Street firm.
On March 15, Nvidia stock climbed 7.7% following the opinion from the Cowen analyst that covers the company that it has “a significant runway for growth” stemming from its established businesses and its Omniverse, which launched last year. The Omniverse is Nvidia’s platform than enables customers to create their own metaverses.
The bottom line in Cowen’s long-term bullish thesis is that Nvidia could “potentially quintuple its revenue and septuple its earnings [in] as little as eight years from now,” as my colleague Rich Smith wrote at that time.
What Rich couldn’t know when he wrote that piece is that Nvidia stock would continue moving strongly upward for the next three days. In the four-day period through March 18, shares rocketed 24% higher. Now, Cowen doesn’t get all the credit for this move, as Nvidia stock surely also benefited from general market dynamics. Tech stocks staged a robust rally over that same four-day period, as reflected by the tech-heavy Nasdaq Composite gaining 10.4%.
Cowen’s rosy long-term growth projection doesn’t come as a surprise to me or quite a few of my colleagues who have also been very bullish for years on this stock, which has been a buy recommendation by at least one of The Motley Fool’s subscription services for many years. Nvidia stock is my favorite metaverse stock, as I wrote most recently in the article The Best Metaverse Stocks to Consider Buying Now.
For fiscal Q1 2023 (essentially the February to April period), Nvidia has guided for revenue to jump 43% year over year to $8.1 billion and for adjusted earnings per share (EPS) to increase 41% to $1.29.
Nvidia’s fiscal Q1 report is scheduled to be released after the market close on Wednesday, May 25.