Shares of Nvidia (NASDAQ: NVDA) closed Friday more than 2% higher, in contrast to a generally flat stock market. It followed an upgrade of price targets from an analyst tracking the stock. It also happened on a good day for cryptocurrencies, which helps boost its business.
That upgrade came from Jefferies forecaster Mark Lipacis, who now believes the Nvidia stock is worth $ 260 per share. That is almost $ 30 higher than his previous price target of $ 233 and almost 14% higher than the current level of the stock. Lipacis maintains its buy recommendation on the shares.
The analyst believes that Nvidia can rise even higher thanks to its software and data center business segments. The latter in particular has made great strides, with revenue increasing 35% on an annual basis in the chipmaker recently reported second quarter to break a new record of almost 2.4 billion.
Nvidia also benefited from one cryptocurrency bull market on Friday. Since its GPUs are the preferred product for many crypto miners, its stock price may be affected by emotions in such assets. Late afternoon, the bellwether cryptocurrency Bitcoin traded just shy of 2% higher – equivalent to Nvidia’s gain – while Ethereum was up to a healthy 4.8%.
Lipacis has certainly made a viable argument for raising Nvidia’s price target. The company has cut profits in many segments of its business. And we must remember that some of the smaller ones, especially the car unit, have great potential.
This article represents the opinion of the author, who may disagree with the “official” recommendation position for a Motley Fool premium advisory service. We are motley! Questioning an investment task – even one of our own – helps all of us to think critically about investments and make decisions that help us become wiser, happier and richer.