NVIDIA Stock is Finally Soaring: Here’s Why it May Hit ATH Soon

Key Insights

• NVIDIA stock price has rebounded in the past few months.
• The company’s investments like Intel and Lumentum, are soaring.
• The bullish flag pattern points to more gains in the near term.

NVIDIA stock price has spent most of this year in an extremely tight range. It has underperformed the benchmark indices like the S&P 500 and the Nasdaq 100. Recently, however, it has soared and is nearing its highest level this year.

NVIDIA Stock to Benefit as Portfolio Companies Surge

NVIDIA is a well-known brand in the semiconductor manufacturing industry. However, it has a long history in backing public and private companies. Its investments have accelerated in the past few years as it experiences the biggest windfall since its inception.

Data shows that its large investments has started to pay off. For example, the company, together with Softbank, took a gamble on Intel last year, a move that saved the company. Today, Intel stock has jumped to a record high and is up by 250% from its lowest level last year.

NVIDIA also backed Lumentum, a top name in the optics industry. It invested $2 billion in the company earlier this year, helping the stock jump to a record high. It has soared by 105% since NVIDIA made the investment.

The same situation happened with Nebius, a top neocloud that is building large data centers. Nebius stock has jumped to a record high after NVIDIA invested $2 billion in it. The surge accelerated after the company received a $27 billion deal from Meta Platforms.

NVIDIA also invested an additional $2 billion in CoreWeave, a company that competes with Nebius. Since then, CRWV stock has soared to its highest level since November last year.

The same is happening in the private companies that NVIDIA has invested in. It recently invested $30 billion in OpenAI, a company that will see a valuation jump when it goes public this year.

Reflection, a company that NVIDIA has invested in, grew its valuation to $25 billion earlier this year. Similarly, SiFive and ElevenLabs are now valued at over $3.65 billion and $11 billion, respectively.

To be clear: these investments may turn sour over time. A good example of this is SoundHound, which NVIDIA invested in last year. After the initial jump to $22, the stock plunged to #$and current $7.

NVDA Valuation Means That it is a Bargain

NVIDIA stock price may go parabolic soon. Investors value it as a bargain despite strong revenue and profitability growth.

A company like NVIDIA has a large moat and strong revenue growth. It should receive a premium valuation compared to the broader market.

This is not happening with NVIDIA, whose forward price-to-earnings ratio is just 20. In contrast, the S&P 500 Index has a multiple of 21 despite having a forward growth estimate of 12%.

NVIDIA’s valuation makes it cheaper than other slower-growing companies like Tesla and Microsoft. Tesla has a multiple of over 120 despite the fact that its vehicle sales are falling. Therefore, NVDA stock price will likely do well as investors buy the dip

NVIDIA Stock Price Technical Analysis

The three-day chart points to more NVIDIA stock price gains today. It has formed a giant bullish flag pattern and is now attempting to move above the upper side of the flag section.

It has also remained above all moving averages, while top oscillators show that the stock has more room to rise.

The most likely NVIDIA stock price forecast is bullish. The next key target is the psychological level at $200, followed by the all-time high of $212.

A cross above $212 will signal that bulls have prevailed. It will point to the next surge toward $250 in the near term.

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