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Nvidia is 'generational opportunity', could grow to become 10-15% of S&P 500

Published 2024/06/10, 11:16
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Nvidia (NASDAQ:NVDA) is a “generational opportunity” that could grow to become 10-15% of the S&P 500 index, Evercore ISI analysts said in a Sunday note.

According to the investment banking firm, Nvidia is not just a semiconductor company but an “ecosystem play” set to lead the age of parallel processing. “driven by an every 15-20 year Tectonic Shift in Computing."

Analysts posit that Nvidia's current breakout above $1,000 per share has "unlocked the door" for the stock to hit as high as $1,500, a projection supported by the strong performance of the Semiconductor Index, which has risen by 87% since October 2023, though still short of the historic tech bubble surge.

Evercore's analysis indicates that Nvidia's growth is far from reaching its peak, with the firm outlining a base case for Nvidia's earnings per share (EPS) power in 2030 at $69, and a bull case reaching $82.

This projection “could be conservative if 2030 prospective “start date” for Artificial General Intelligence (AGI) materializes,” the note states.

It also highlights that while high-profile stock splits often fuel short-term volatility, they also “reset the generational buying opportunity, time after time.” Nvidia's upcoming 10:1 stock split is expected to be a catalyst for a temporary surge followed by a strategic buying opportunity for patient investors.

While Evercore views NVDA as a standout opportunity, it remains bullish on other “AI revolutionaries.” As the firm explains it, these are the companies “enabling the AI Revolution and those who have adopted AI quickly in order to deepen their competitive moats.”

“These names are long-term buy and hold stocks, cornerstone of an AI exposed portfolio,” Evercore added.

Some of the stocks on its AI revolutionaries list are Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), Salesforce (NYSE:CRM), Pinterest (NYSE:PINS), Broadcom (NASDAQ:AVGO), and Uber Technologies (NYSE:UBER), among others.

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