Analysts reset Nvidia stock price targets amid split, Dow entry talk

Nvidia shares will begin trading on a split-adjusted basis Monday, but remain the world's third most-valuable stock.

Jun 10, 2024 - 22:30

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Analysts reset Nvidia stock price targets amid split, Dow entry talk

Updated at 11:08 AM EDT

Nvidia shares edged higher Monday into the AI leader's first day of trading following a 10-for-1 stock split and a host of price-target changes from Wall Street analysts.

Nvidia (NVDA) , which briefly overtook Apple as the world's second-biggest company by market value last week, will begin trading on a split-adjusted basis on the Nasdaq, with an opening bell price of $120.38 per share.

Nvidia unveiled its stock split plans last month, following a blowout fiscal-first-quarter-earnings report that included better-than-expected sales and a robust demand outlook for its new line of Blackwell processors. The Blackwell line is expected to power a host of AI-related systems built by Meta Platforms (META) , Microsoft (MSFT) and Amazon (AMZN) .

The split, Nvidia said, saw common-share holders receive nine new shares for every one of their original holdings, with the aim of "making stock ownership more accessible to employees and investors."

The move has triggered a series of price-target changes for the stock by Wall Street analysts, as well as speculation that the group could be added to the Dow Jones Industrial Average now that its price level is more commensurate with other stocks in the 30-strong benchmark.

Nividia CEO Jensen Huang has seen the company he founded in 1993 add more than $1 trillion in value over a period of 74 trading days.
Gene Wang/Getty Images

Morgan Stanley analyst Joseph Moore, who lowered his rating on Advanced Micro Devices (AMD) to equal weight from overweight, also clipped his objective for Nvidia to a split-adjusted $116 per share as he sees the group cutting chip and processor prices to fend off its rivals.

Blackwell price cuts

"Lower Blackwell pricing, broader Hopper availability and data-center power challenges could become more material headings to Nvidia alternative this year and next," Moore said of AMD.

"Our checks would indicate that Nvidia is clearly focused on defending market share, accelerating their road-map cadence and becoming more aggressive with pricing," he added.

Susquehanna analyst Christopher Rolland boosted his Nvidia price target to a split-adjusted $145 a share. He said concern about a so-called air pocket in sales between the launch and delivery of new Blackwell systems seems to have been overcome by ongoing demand for its legacy H100 Hopper chips.

Barclays analyst Blayne Curtis, meanwhile, sees greater sales opportunities for Nvidia from so-called sovereign AI demand, which refers to nation states building data centers to train large language models with AI tools to support government functions.

Curtis, who lifted his price target on Nvidia to a split-adjusted $145 per share, also revised his current-year revenue forecast by $25 billion, to $157.1 billion, with full-year earnings in the region of $3.62 per share.

Nvidia shares were marked 0.65% higher in early Monday trading and changing hands at $121.62 each.

Next stop: the Dow?

The lower share price added to speculation that Nvidia could be added to the Dow industrials this year or next, given its broader importance to overall market performance and its status as the world's third-biggest company by market value.

Intel (INTC) , which has a market value of $130 billion and has fallen more than 33% over the past five years, compared to a 48% gain for the benchmark, is perhaps the most likely candidate for replacement.

S&P Dow Jones Indices is not above turfing big-name stocks from its bellwether, either, having knocked out AT&T (T) for Apple in 2015, less than a year after the iPhone maker unveiled a 7-for-1 stock split in June 2014.

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Pfizer (PFE) got the boot in summer 2020, alongside Exxon Mobil (XOM) and Raytheon (RTX) , to make way for Amgen (AMGN) , Salesforce (CRM) and Honeywell (HON) .

The Salesforce addition, however, could give officials a good reason to take their time on swapping out Intel for Nvidia.

Shares in the client-focused software group have fallen 11% since their Dow debut in September 2020, while Exxon has gained 173% since it was replaced.