Nvidia stock has 10% more upside this year after blockbuster earnings show AI dominance has room to run, Wedbush says

• Nvidia stock has 11% more upside this year after blockbuster earnings, Wedbush said.
• Wedbush has raised its 12-month price forecast to $850 from $800, "stepping on the AI accelerator."
• "We don't necessarily see a quarter where momentum should slow this year."

Nvidia's earnings report was a hit. Now, Wedbush Securities thinks the stock is poised to rally even higher.

In a note on Thursday following the chip maker's stunning fourth-quarter report, Wedbush analysts bumped up their 12-month price forecast for Nvidia's stock from $800 to $850, saying they were "still stepping on the AI accelerator." A jump to that level would represent about a 10% spike from intraday highs of $774 around 9:50 a.m. ET on Thursday.

"We don't necessarily see a quarter where momentum should slow this year," they wrote.

Nvidia posted a fourth-quarter revenue of $22.1 billion, more than triple the $6.05 billion it made a year ago, and blowing past estimates of $20.41 billion. Its net profit was $12.29 billion, rocketing up from $1.41 billion a year earlier.

Following the report, Nvidia's stock jumped 13% shortly after the opening bell on Thursday. After investor jitters before release on Wednesday, the stock stumbled and closed at $674.72. It's now whipsawed to around $764 a share.

And there are reasons even more gains are ahead in the next year, Wedbush said.

For one, the company is unlikely to see a weak first-quarter report because its shipments are expected to grow, according to analysts' conversations with key manufacturers. Secondly, Nvidia is set to release a new chip, the H200, which is expected to see strong initial demand and keep second-quarter earnings positive, too.

"Add in signs that customer demand/funds seemingly continue to grow (CSP budgets, AI funding, etc.) as well as some benefits from NVDA's continued growth in important adjacencies such as software/models [...] and we believe any pause appears unlikely to manifest in FY'25."

Nvidia has been catapulted to the forefront of the AI boom because of the chip that it produces and which is in such high demand: the GPU. Those chips are widely used in data centers that are the backbones of complex AI models. The company's data center revenue can in at $18.4 billion, up 408% since last year.

"Guidance, in turn, implies solid growth off the higher number again fueled by the velocity of NVDA's datacenter business," the analysts wrote about the earnings report.

Several banks have also upped their price price targets for Nvidia post-release. Bernstein has raised its price target to $1000 from $700. Goldman Sachs has raised it to $875 from $800. UBS is one of the few firms to cut its price forecast, down to $800 from $850.