Can Nvidia Stock Reach $150 Before the End of 2024?

Nvidia's stock price is currently on an impressive upward trajectory, and many are asking if it might hit $150 before the year 2025. Starting the year at just around $50 (adjusted for stock splits), Nvidia has seen its value soar to about $130. With still many trading days left before the end of 2024, the possibility of reaching this milestone seems quite achievable.

The Role of GPUs in AI Growth

The surge in Nvidia's stock is closely linked to the booming field of artificial intelligence (AI). Many businesses are vying to create the best AI models, and tech giants in cloud computing are significantly boosting their computing capabilities by purchasing more of Nvidia's graphics processing units (GPUs).

GPUs are ideal for this work because they can handle numerous calculations simultaneously, making them perfect for processing demanding AI tasks. Companies can also link together thousands of these GPUs, resulting in the ability to tackle large AI workloads quickly and efficiently.

However, these GPUs come with a hefty price tag. For instance, the popular Nvidia H100 GPU costs approximately $25,000. To illustrate, if a company like Tesla deploys 10,000 GPUs for its Dojo system, the total expense can easily surpass $300 million when accounting for other system components.

Still, GPUs are not a recurring revenue model; Nvidia must continuously sell more products to keep growing. One potential growth driver could be the introduction of its new GPU architecture, Blackwell. This architecture promises significant improvements over the previous version, Hopper, offering faster calculations and reduced energy consumption. This upgrade may encourage customers to refresh their hardware and contribute to Nvidia's continued growth.

The rollout of Blackwell has experienced several delays, with production expected to ramp up in the fourth quarter of 2024. A key update will likely come during Nvidia’s upcoming Q3 earnings report for fiscal year 2025, scheduled for late November, which could provide a significant boost to the stock and help it reach the $150 goal.

High Investor Expectations

Nvidia's stock currently reflects very high expectations, trading at 48.6 times its expected future earnings—a notable premium. Typically, stocks don't maintain such high valuations unless they can sustain impressive growth rates. If the expected growth doesn't materialize, investors might sell off their shares, leading to reduced valuations.

Nvidia has successfully met the high expectations of investors thus far, and it must continue to do so well into 2025 and beyond to maintain the returns that its shareholders are used to.

So, is it feasible for Nvidia to rise to $150 this year? Given the prevailing excitement surrounding AI, it seems quite possible, especially if the results from Nvidia’s Q3 fiscal-year 2025 are strong. These results will only be available in late November, and they might be influenced by external factors such as the upcoming election, which could lead to significant market reactions.

Looking ahead, there are numerous uncertainties, but one clear trend is that we are still in the early stages of AI integration. The demand for more GPUs is expected to grow as companies strive to maximize AI capabilities. Even if Nvidia doesn’t reach $150 by the end of this year, the outlook for 2025 remains optimistic for achieving this target soon after.

Nvidia, Stock, AI