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Nvidia (NVDA) mania is heating up ahead of the market darling’s earnings report on Wednesday.
Eric Jackson, founder and president of EMJ Capital, said on the Opening Bid Podcast with Yahoo Finance Executive Editor Brian Sozzi that the company “represents the most important stocks in America.” (Watch below, video above).
Jackson reiterated his claim that Nvidia’s stock price could double within the next 12 months, given Nvidia’s significant lead in AI chip production.
“Investments[in AI]are still in their infancy,” Jackson added. “The need for these chips will continue for the next one, two, three years.”
NVIDIA stock has risen more than 2,600% over the past five years, according to data from Yahoo Finance, helped by a string of strong quarters in which the company took the top spot in cutting-edge chips.
The company’s strong performance is expected to continue in the third quarter, with sales and profits each estimated to increase 83% year over year. Wall Street remains bullish on favorite stocks.
According to data from Yahoo Finance, 59 of the 63 sell-side analysts covering NVIDIA rate the stock as a “buy” or “strong buy.” The average price target is $160.38, about 13% above current levels.
“We view short-term risks as largely balanced and we are buyers of NVIDIA heading into its third-quarter earnings report scheduled for Wednesday. Positive set-up with cloud service provider booking acceleration Index, Upward Bias in Hyperscale Capital,” Evercore ISI analyst Mark Lipasis said in a client note on Monday.
Lipasis said if Nvidia disappoints investors, it will show up in the form of slower revenue growth.
There’s been a whirlwind of activity around Nvidia lately.
In addition to displacing Apple (AAPL) and Google (GOOG) to become the world’s most valuable company, Nvidia joined the Dow Jones Industrial Average on November 8th. Former chip leader Intel (INTC) was ousted.
“It’s good to have Nvidia on board,” Jackson said, noting that it could encourage retail investors to buy.
One potential problem was the Biden administration’s restrictions on sales to China and subsequent writedowns that were “a significant part of the quarter’s profit,” Jackson said. “They needed to get it down to zero.”
President-elect Donald Trump may also maintain a firm stance on the tipping issue by fulfilling his campaign promises regarding China.
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