Why Nvidia's Strategy Hints At A 'Fast-Rising' Stock Price

Shares of NVIDIA Corporation NVDA just keep going higher, and the stock simply keeps getting more love from Wall Street. Just a day after Citigroup upped its bull case price target for Nvidia to $300, Argus analyst Jim Kelleher raised his price target from $145 to $175 and said Nvidia should continue to be a “fast-rising stock” (check out Jim Kelleher's track record).

“Nvidia has a clear strategy for successfully monetizing its graphics processing know-how in multiple markets, all of which are fast-growing and transformative,” Kelleher wrote.

Related Link: The Bull Case For Nvidia: $300 Per Share?

In the past, the Nvidia story has been all about PC gaming, a business that had driven shares of Nvidia higher by more than 700 percent in the past three years. Today, Nvidia is expanding its technology into the fledgling businesses of virtual reality, machine learning, artificial intelligence and autonomous driving.

Looking Forward

A big part of Nvidia’s future will involve the Volta GPU that the company expects to roll out in 2018 or 2019. Nvidia investors are hoping Volta follows in the footsteps of the successful launch of Pascal architecture in 2016.

In addition to the high end of the market, Nvidia is also targeting the low end of the CPU market and targeting the growing base of eSports fans as well, Kelleher wrote.

Nvidia investors worried about the stock’s meteoric rise should remember that the company’s revenue, earnings and cash flow growth is well above any of its peers, Kelleher wrote. The stock’s valuation isn’t nearly as steep when long-term projections are included. Nvidia’s two-year forward PEG ratio is just 2.5, only slightly higher than the 2.0 ratio of its peers. Argus maintains a Buy rating on Nvidia, which at time of publication, were up 4.47 percent at $167.09.