Nvidia’s Stellar Surge Continues – What Investors Need to Know
After a whopping 251% climb over the past year, Nvidia (NVDA) is keeping the momentum going. On January 8th it pushed past its previous high of $505.44, sparking a two‑day rally that added another 4.7% to the price. The flashback win came with a 6.43% jump on higher-than‑usual volume – a sign that the crowd is still betting big on the chip maker.
Why the stock’s rocket‑ship growth feels so legit
- In 2023, NVDA’s earnings per share (EPS) exploded by 268%. Analysts now expect an average annual earnings growth of 103% for the next five years.
- 2024 alone is projected to bring a 66% increase in EPS – that’s not just a good story, it’s a blockbuster.
Those numbers sound pretty convincing, but the cherry‑on‑top is the price‑to‑earnings (P/E) ratio of 71.5. A high P/E can hint at an over‑valued stock, yet for fast‑growing companies it’s often just another way of saying “we’re ahead of the curve.” Keep in mind:
- NVDA’s forward P/E sits at 26.6, much closer to the S&P 500’s 26.
- In 2023 the stock’s P/E once shot up to a staggering 258, then steadied. The high global figure didn’t come from a price drop so much as from skyrocketing earnings.
Technical beats: Where’s the target?
Using a classic breakout method – add the prior range to the breakout point – we land close to a $610 target. If we look at the big up‑waves so far:
- Late 2022: 55% up before choppiness hit.
- Early 2023: 65% up before a sideways stretch.
- March 2023: 22% gain before another pause.
- May‑Jul 2023: 40%+ rise, punctuated by small pullbacks.
A 22% rally off the recent January low would point to roughly $580.
A 50‑60% move could take us to the $710‑$760 sweet spot.
The flip side: Risks you should mind
NVDA’s current run feels rock solid, but fast growth can be fickle. If earnings fall short of the lofty forecasts, expectations may dip, or a sudden market shift could trigger a sell‑off. Even “safe” giants like Nvidia aren’t immune to a downturn – remember the 65% slide from 2021 highs to 2022 lows? The rally that followed was just one chapter.
Pro tip: Use risk management like you would your favorite smartphone
Set a comfortable position size relative to your portfolio and always have a clear exit plan, whether the market tops or stays flat. That way, you’ll keep your account humming, regardless of the stock’s next move.
In short: Nvidia’s earnings rockets, coupled with hefty upside potential, make for an exciting play. Just keep your guard up and your smile ready – you never know when the market will throw a curveball.
