Could Nvidia Stock Hit $5,000 By 2030? | NVDA Stock Prediction | Nvidia Stock Prediction

could nvidia's stock price reach $5,000 per share by 2030 that's an exciting proposition considering Nvidia stock price is currently trading at $942 so that would entail a 5x increase over the next 6 years so in this video I'll answer that question I'll look at a few estimates and assumptions make some forecast do some scenario analysis to determine if nvidia's stock price has a chance at hitting $5,000 per share by 2030 so let's get right into it I want to thank the mle fool for sponsoring this video visit fool.com parev for the 10 best stocks to buy now all right so like I mentioned Nvidia stock price has absolutely soared in recent years jumping from a little under $200 per share in 2021 up to $942 as of this recording so it's not unlike Nvidia stock price hasn't achieved these types of phenomenal gains before so so it's not an unrealistic proposition to consider Nvidia stock price soaring to $55,000 per share especially because it's a leading player in one of the hottest investment opportunities in a very long time in artificial intelligence so it's not a outlandish proposition at all right now Nvidia stock price is trading at a forward price to earnings of 31.4659 come up with the conclusion of where nvidia's stock price could be in 2030 this is going to be a key input that we're going to reference when we're making that stock price prediction I'm also going to need some earnings per share forecasts for Nvidia stock as of today the current year forecast is for NVIDIA to deliver $224.58 in earnings per share this year and then $304 of earnings per share next year keep in mind NV is one year ahead in terms of fiscal year compared to calendar year you can see that it says its current year is 2025 even though we're in calendar year 2024 and it says next year is 2026 even though that's going to be calendar year 2025 so I'm going to adjust for that when I'm making my prediction of where Nvidia stock price could be in 2030 and whether or not it could reach $5,000 per share I'm also going to need nvidia's earnings per share outlook for the next 5 years and according to this estimate which collects a consensus from Wall Street analysts that are following Nvidia stock it's expected to grow earnings per share at 39 37. 89% per year for the next 5 years that's the expected growth rate in earnings per share for the next 5 years that's more than triple the rate that's expected with the S&P 500 which is expect expected to grow at 10.9% per year over the next 5 years so now that we have those numbers I want to draw your attention here to the bottom leftand corner where I have the EPS here for 2026 expected at $30 47 $304 and the growth rate of 37.8 n% when I appli that EPS with the growth rate and forecast where earnings per share will be in the year 2031 remember I'm going to be using the forward price to earnings ratio so I need the EPS for 2031 to make the price prediction for 2030 and according to this forecast earnings per share could be $151 in 2031 $151 in 2031 so now let me draw your attention to the top right hand corner if I applied that $151 earnings per share forecast for 2031 and I applied the 31 price to earnings ratio it's currently trading at the forward PE I would get an estimated stock price of $478 per share that would be a huge increase from the current share price of $942 per share but it would not be $5,000 per share it would not be $5,000 in order for the the stock price to exceed 5,000 you would have to get a higher price to earnings ratio or higher earnings per share and if the price to earnings were to increase to 35 then the stock price could increase to $531 16 per share so in order for the stock price to exceed $5,000 the earnings per share the price to earnings would need to be 33 or above 33 or above for the forward PE with the same earnings per share expectations to hit $5,000 per share not a totally unrealistic thing not totally unrealistic at all for NVIDIA a company that's growing rapidly dominating the market strong market share strong competitive Advantage great profitability expanding profit margins expanding cash flow from operations all of which leads to better valuation for a company so could be possible but what if it's even higher what if the forward PE at 40 what if the AI Market continues to exceed our expectations and there's newer and greater developments in AI what if AI helps fuel driverless cars by the year 2030 what if we have driverless cars broadly available on the roads today powered by Nvidia gpus wouldn't that cause a increase in valuation for NVIDIA I think so and that could lead to a stock price of 6,075 per share but what if the stock price the valuation were to decrease to 25 well then the stock price would still have a huge Improvement all the way up to 3,797 but it wouldn't be $5,000 per share so to answer the question posed in the title of the video could Nvidia stock reach $5,000 per share by 2030 yes I think it could given these estimates given these forecasts I think it has a very realistic chance of hitting that I would say it's the second most probable outcome I have outlined here in this analysis the most probable outcome I would say is a stock price around 4,700 or $4,500 per share is more likely more probable than 5,000 because that would match the current forward PE with the EPS estimate and it wouldn't entail any increases in either of those metrics it would just mean that the valuation stays the same the earnings per share estimat stay the same and that would increase the stock price to that value by 2030 so it wouldn't entail any increases for it to hit 5,000 it would mean one of the two needs to increase either the earnings per share estimate needs to increase or the forward PE needs to increase Which is less likely than the forward PE staying the same and the EPS stay staying the same that's why I say the more probable outcome is the $4,500 to $4,700 per share by 2030 which I don't think any investor will complain right if you buy shares today at 947 and you hold them for roughly five six years and they're up to 4,500 or 4,700 I think every investor would be happy with that kind of return on investment from Nvidia stock so I think Nvidia stock has great prospects I think its long-term potential is excellent that's one of the reasons I've placed Nvidia stock as a buy and actually I have Nvidia stock rated as one of my top stocks to buy in 2024 Before I Let You Go let me tell you about the greatest deal on YouTube with just a click of a button you can get free financial analysis from a professor with Decades of investing experience so what are you waiting for hit that subscribe button and I'll see you again soon

Channel: Parkev Tatevosian, CFA

Views: 32,288

Keywords: #growthstockstobuy, #beststockstobuynow, #stocks, #investing, #dividends, #dividend, #dividendinvesting, #dividendstockstobuy, #growthstocks, #evstocks, #topstockstobuy, #topdividendstockstobuy, #passiveincome, #invest, #investments, #investors, #warrenbuffett, #warrenbuffet, #cathiewood, #cathiewoods, Tesla, Teslastock, Teslastockanalysis, Amazon, Amazonstock, Amazon stock analysis, Sofi stock, Sofi stock analysis, Rivian Stock analysis, Rivian stock, Palantir stock, Palantir stock analysis, Roblox stock

Id: RGVID80y9oc

Length: 8min 30sec (510 seconds)

Published: Sun Mar 24 2024