Stock Market News From March 19, 2024: Dow Rises Ahead of Fed Rate Decision; Nvidia, Tesla, Xpeng, and More Movers; Bitcoin Tumbles Amid Crypto Correction (2024)

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Is it a good time to buy Nvidia stock? ›

NVIDIA (NVDA)

Following the selling this month, analysts are more bullish for the next 12 months for Nvidia stock. They're calling for Nvidia to trade for 130.38 in a year's time. If they're right, it would mark implied upside of more than 10%. Seeing Nvidia halt its slide would be a welcome change for investors.

Overall, Yardeni Research forecasts S&P 500 operating earnings at $250 in 2024, up 12% vs 2023. He puts them at $270 in 2025 (up 8%) and $300 in 2026 (up 11.1%). These figures compare with analysts' consensus forecasts of $244.70 in 2024, $279.70 in 2025 and $314.80 in 2026.

While interest rate trends influence the stock market, performance is also closely tied to the strength of the U.S. economy. “As the Fed raises interest rates, we typically expect slower economic growth,” says Eric Freedman, chief investment officer for U.S. Bank Wealth Management.

Consensus estimates predict Nvidia's earnings will increase at an annual rate of just over 35% for the next five years. Based on the company's fiscal 2024 earnings of $12.96 per share, its bottom line could jump to $58.11 per share after five years, assuming it does increase at the predicted rate.

With its 3-star rating, we believe Nvidia's stock is fairly valued compared with our long-term fair value estimate of $910 per share, which implies an equity value of roughly $2.2 trillion.

The S&P 500 soared throughout the year and finally reached a new high in January 2024, making the new bull market official. The onset of a new bull market has historically been a very reliable stock market indicator.

Cyclical stock sectors

The consumer discretionary, technology, real estate, and financial sectors have historically been especially likely to outperform the market when rates fall and earnings rise. Financial stocks look particularly appealing, due to how inexpensive they've recently been.

In other words, the market's anticipation that the Fed would lower rates had a positive effect stock prices, since it assumes that a company's earnings per share and profits will rise as borrowing costs decline. In effect, lower interest rates lead to higher price-to-earnings metrics and vice versa.

There's been nearly insatiable demand for Nvidia's chips to power artificial intelligence applications and the company has played a big role in the U.S. stock market's recent record runs even as the economy's growth slows under the weight of high interest rates.

Based on analyst ratings, Nvidia's 12-month average price target is $156.35. Nvidia has 32.38% upside potential, based on the analysts' average price target. Nvidia has a consensus rating of Strong Buy which is based on 38 buy ratings, 3 hold ratings and 0 sell ratings.

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Amazon stock hits $3,000 for the first time as investors continue betting on Seattle tech giant. Amazon stock just keeps on climbing. The Seattle company saw shares rise above $3,000 for the first time ever Monday morning.

NVIDIA Stock Forecast

The 40 analysts with 12-month price forecasts for NVIDIA stock have an average target of 122.71, with a low estimate of 47.5 and a high estimate of 200. The average target predicts a decrease of -2.92% from the current stock price of 126.40.

Analysts believe that Nvidia will grow earnings by a staggering 31.7% annually over the three-to-five years. And this leads to a price-to-earnings-to-growth (PEG) ratio of 1.47. Traditionally, a ratio above one suggested a firm was overvalued, but that's not the case these days.

The NVIDIA stock prediction for 2025 is currently $ 228.12, assuming that NVIDIA shares will continue growing at the average yearly rate as they did in the last 10 years. This would represent a 80.23% increase in the NVDA stock price.