Tech-heavy stock indexes are taking a break from their ferocious rise, but Wall Street says some Nasdaq stocks still have room to rise.
The Nasdaq Composite Index is a broad, tech-heavy index that tracks the performance of over 3,000 stocks listed on the exchange. In early July, the index hit a new all-time high, its sixth consecutive record high and its 27th record high so far this year. After this impressive rally, the Nasdaq took a well-deserved break, with recent prices down about 11% from its peak. This has led some investors to wonder if the rally has lost steam. Wall Street sees room for more upside.
XM Investments analyst Marios Hadjikyriakos is among the bulls. “The stock market is performing well on all fronts, buoyed by a resilient U.S. economy and speculation that a Fed rate cut is on the horizon, justifying rich valuations,” he wrote. UBS analyst Mark Haefele agreed, writing in a client note that “record highs often leave investors worried that the market may have peaked. These fears are not supported by history.”
Here are two Nasdaq stocks that still have plenty of upside potential and could soar as much as 226%, according to Wall Street analysts.
Image source: Getty Images.
NVIDIA: Up 83%
The first Nasdaq stock with big potential is Nvidia (NVDA -1.78%)The semiconductor specialist has been one of the biggest early winners of the artificial intelligence (AI) revolution by providing chips that enable the technology. NVIDIA’s graphics processing units (GPUs) were already the gold standard in video games, data centers and the nascent world of AI. The emergence of generative AI early last year saw the company’s sales and stock price soar.
A quick look at NVIDIA’s latest financial results shows why: For the first quarter of fiscal 2025 (ended April 28), the company reported record revenue of $26 billion, up 262% year over year, and earnings per share (EPS) of $5.98, up 629%. Revenue from its data center division, which includes data center and other AI chips, was $22.6 billion, up 427% year over year.
Despite the stock’s rise of more than 600% since the beginning of last year (as of this writing), Wall Street remains a strong supporter of Nvidia, with Rosenblatt analyst Hans Mosesmann giving the company a buy recommendation with a Wall Street-high $200 price target, which represents an 83% upside potential compared to Thursday’s closing price.
Mosesman believes the chipmaker’s product pipeline is underappreciated: “We see NVIDIA’s Hopper, Blackwell and Rubin series driving ‘valuable’ market share during one of Silicon Valley’s most successful silicon/platform product cycles,” he wrote.
Analysts aren’t the only ones bullish on Nvidia: Of the 58 analysts who commented on the stock in June, 53 rated it a buy or strong buy, and none recommended selling.
Some investors may be disillusioned by Nvidia’s valuation, but that view is shortsighted: At recent prices, the company trades at just 34 times forward earnings, but Nvidia’s growth rate shows why that premium is justified.
Mobileye: Expected to rise 226%
The second-most powerful stock on the Nasdaq with room to rise is Mobileye Global. (MBLY -1.97%)The majority of the company’s revenue comes from advanced driver-assistance systems (ADAS), which it pioneered more than 20 years ago. The move turned out to be prescient, as Mobileye controls roughly 70% of the market and expects to grow its share to 75% by 2026.
But the biggest opportunity is the potential for broader adoption of autonomous vehicle systems, known as self-driving cars. Several big-name companies, including Alphabet’s Waymo, Tesla and Baidu, have all deployed self-driving technology, but most of these systems are not yet ready for primetime use. However, last year Mobileye was recognized as an industry leader in autonomous vehicle technology in two separate reports issued by Guidehouse Insights and ABI Research.
That said, Mobileye’s business volatility has kept many opportunistic investors on the sidelines. And therein lies the opportunity. Management projects 2024 sales of $1.6 billion at the midpoint of its guidance, which would represent a decline of about 27% year-over-year. As a result, the company’s shares have fallen more than 60% so far this year. When Mobileye released earnings earlier this week, the company cited a slowdown in late auto production, primarily in China, as the reason for the guidance cut. CEO Amnon Shashua was quick to point out that the guidance represents a “worst-case scenario,” suggesting that the stock could rise if the business’s trajectory improves even slightly. That said, the company clearly has challenges remaining.
One Wall Street analyst seems to be sticking to his guns. Despite the flurry of price target cuts, Citi analyst Itai Michaeli did not update his guidance after the earnings release, maintaining a buy recommendation on Mobileye shares with a price target of $53 (as of writing), which represents a potential upside of 226% compared to Thursday’s closing price. The analyst called the first quarter results “promising” and noted potential customer acquisitions could be a potential catalyst for the rest of the year. He went on to say that the fundamental thesis remains “more or less intact.”
Many on Wall Street seem to agree: Of the 27 analysts covering the stock in June, 23 rated it a buy or strong buy, and none recommended selling.
Finally, Mobileye’s stock is priced at just seven times forward sales, making it attractive if the opportunity arises. Even a small recovery in the company’s business could send the stock soaring.
Citigroup is an advertising partner of The Ascent, a Motley Fool property. Suzanne Frey, an Alphabet executive, serves on The Motley Fool’s board of directors. Danny Vena has invested in Alphabet, Baidu, Nvidia, and Tesla. The Motley Fool has invested in and recommends Alphabet, Baidu, Nvidia, and Tesla. The Motley Fool recommends Mobileye Global. The Motley Fool has a disclosure policy.
