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Analyst price targets on Nvidia (NASDAQ:NVDA) stock were initially all over the place. The rally has continued for over 3 years, with both revenue still growing at breakneck speeds. Some analysts are now making bolder moves and are starting to coalesce near even more ambitious targets.
The highest such recent price target projects NVDA stock at $352 next year. This implies a massive 101% leap from here and comes from Evercore ISI analyst Mark Lipacis.
This analyst has an excellent history of making winning calls, with 69% of his ratings being successful, with an average return per rating of 28.3% over the past year. This is exceptionally good, and puts him at #32 out of over 10,000 tracked Wall Street analysts.
Should you take this rating seriously? Let’s take a look.
Why Evercore raised its price target on NVDA stock
On November 20, Lipacis lifted his price target on NVDA stock from $261 to $352. He used the company’s inventory buildup “to support large orders” as his rationale for the price target increase. This may look counterintuitive at first, as a bigger inventory usually means products are not being sold.
However, the rising inventory is viewed bullishly because Nvidia itself has said they’re building up to meet unprecedented AI compute demand, not excess supply. Their backlog for 2025 and 2026 is at $500 billion, with the company’s CFO saying that even this is tentative and could be an underestimate due to constant demand from hyperscalers.
Lipacis believes revenue growth could accelerate to 79% by mid-2026. If this happens, Wall Street is likely to slap a higher premium on NVDA stock. The current forward price-earnings ratio of 23 times makes NVDA stock cheaper than Advanced Micro Devices (NASDAQ:AMD) at 33 times and Intel (NASDAQ:INTC) at 63 times.
Can Nvidia keep expanding its lead?
Nvidia’s competitors have failed to make ground. Many other AI chipmakers have cost-effective products, but they pale in comparison to what Nvidia has to offer. Nvidia essentially has the AI chip market locked inside its walled garden. It is very difficult and expensive for any major hyperscaler to switch from Nvidia’s CUDA ecosystem to another one. Nvidia has been making it even harder with the recent CUDA tiles update that will get developers even more hooked.
Chinese AI startup DeepSeek tried training its upcoming model with Huawei’s AI chips but failed. It reportedly ended up reverting to Nvidia’s chips. This failure likely cost DeepSeek the momentum it built up earlier this year with its R1 model. Other AI companies are unlikely to start tinkering around with their AI chip suppliers at scale, since a failure that sets back a company just a few months could cost them dearly.
All of this means that Nvidia is unlikely to give up its lead anytime soon.
Should you snap up more NVDA stock?
It’s going exceedingly well for Nvidia, but the rally won’t go on forever. Even if Nvidia has a large lead in the market, the ongoing “AI revolution” will dictate what happens to NVDA stock. If the buildout continues for years and years, Nvidia will climb along with it. That seems to be what Lipacis is betting on.
At the same time, hyperscalers don’t have infinite cash to throw at AI chips. Companies like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) are making headway with their own AI chips to use in-house and avoid the margins on Nvidia’s chips. Meta Platforms (NASDAQ:META) is not a hyperscaler, but the AI spending has already evaporated its net cash position, and it is now in net debt.
Nvidia could either end up like IBM (NYSE:IBM) and trade sideways or Cisco (NASDAQ:CSCO), where it gives up almost all of its gains once this AI buildout ends.
Only time will tell, so it’s still a good idea to keep around 10-15% of your portfolio in NVDA. If you are already at that level, I wouldn’t snap up more unless you get a bigger discount.