NVidia (NASDAQ: NVDA) has achieved an impressive rally in the last 12 months. Its AI-fueled bull run has so far delivered a 211% price gain in the last 12 months. But is NVIDIA a good stock to buy accounting for its recent performance?

If you are wondering if NVIDIA is a good stock to buy in the second half of 2024, then you should be able to make a more informed decision after reading this article.  It has been making headlines for some time now, and our goal is to assess the factors driving that rally to determine if is it really overbought or will there be more gains further down the road.

NVIDIA’s price history

The aforementioned 211% rally only encompasses its performance in the last 12 months. According to Google Finance, NVIDIA traded as low as $305.38 exactly one year ago. It exchanged hands at $953.86 at press time. However, zooming out reveals an even more impressive façade.

Nvidia price chart
source : Google Finance

NVIDIA traded as low as $36.25 in 2019 and its performance has been parabolic in the last 5 years. It has so far rallied by over 2,500% during that period. This means $1,000 invested in its shares 5 years ago would now be worth roughly $25,000.

Is NVIDIA a good stock to buy: NVIDIA catalysts

NVIDIA managed to sustain healthy growth in 2019 and especially during the pandemic years. It managed this courtesy of an eruption of computing demand from Proof Of work miners, which added on to already existing demand from the gaming industry.

The stock continued to gain more recently thanks to a surge in GPU computing demand, largely fueled by AI. This AI trend is only taking off, which means the demand could continue soaring.

NVIDIA’s moat

Many investors consider NVIDIA a good stock to buy because it has always had a good moat strategy, allowing it to outshine its competition. For example, its dominance in the GPU market allowed it to thrive during the pandemic and it is the same reason why it is thriving now during the AI boom.

The same moat might allow NVIDIA to dominate the medical industry. The company is reportedly involved in the creation of AI research that focuses on training surgical robots. Imagine precision medical surgeries conducted by robots.  Nvidia is now at the forefront of that too.

Is a stock split in the works?

Speculation about a potential NVIDIA stock split is starting to surface especially now that the stock is approaching the $1,000 mark. Why is this important? Well, a split makes it easier for investors to get in at a lower price.

A stock split would eliminate the perception that NVIDIA might be overvalued. At the same time it would set the stage for more potential upside as its value proposition continues to grow courtesy of its expanding businesses.

It is worth noting that ENVIDIA conducted a 4 to 1 stock split in 2021. Its stock price would be well above the $3,500 price tag were it not for the split. This may also ward off short selling pressure.

NVIDIA price prediction

NVIDIA investors are reportedly optimistic about its performance in the near future. The current revenue estimate for its Q1 FY25 is 24 million, which is a significant gain from the $22.1 billion it achieved in the previous quarter. Its current dividend earnings estimate is also notably higher at $5.19, compared to the $4.93 EPS announced for the previous quarter.

The stock might experience a significant rally if the earnings and revenue figures outperform analyst expectations. Moreover, favorable conditions in the market could set the state for more potential upside in the short and long term. Based on these observations, a $1,000 price tag seems highly probable in the near future. This is a good thing for anyone wondering is NVIDIA a good stock to buy.

Is NVIDIA a good stock to buy Conclusion

Looking back at NVIDIA’s history, we see that its ability to innovate at the bleeding edge of technology has greatly contributed to its immense success. The fact that it has also managed to stay ahead of the competition means the stars are well aligned for the stock’s future. Nevertheless, investors should also consider the prevailing economic conditions and dynamic liquidity which might be affected by volatile geopolitical factors.

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