Can NVIDIA Corporation Continue To Climb In 2017?

Written by StockNews.com

NVIDIA Corporation (Nasdaq:NVDA) has been the best-performing stock in the S&P 500 this year. Can it continue to climb in 2017?

Without question, NVIDIA has massive momentum behind it right now. After several years of solid share price growth, the stock soared in 2015, and then got downright parabolic this year.

Conventional wisdom would dictate that you probably shouldn’t buy a stock that’s already risen 171% year-to-date but, then again, conventional wisdom is often wrong. There are plenty of technical and fundamental reasons to believe NVDA can continue to outperform in 2017 and beyond.

Big Growth Drivers

Once known only for computer graphics cards, NVIDIA has recently made big strides in the fast-growing datacenter and autonomous driving spaces. While PC related revenue still accounts for about 70% of the company’s sales, impressive top-line revenue growth in its datacenter (+120% year-to-date) and auto (+58% year-to-date) units are indicative of the real future of the company. Virtual reality, which is finally beginning to make sense from a consumer standpoint, will also likely be a big growth driver in coming years.

Wall Street Is Bullish

A search for bullish analyst moves on NVDA reveals plenty of positive sentiment from Wall Street. Price targets are rising across the board as analysts attempt to keep up with the stock’s massive rally, and it’s clear that despite its already-big gains, analysts still expect additional upside. Needham & Co., Citigroup, and MKM Partners all have price targets of $100 or above, for example.

Expect More Of The Same In 2017

Looking ahead to 2017, while NVIDIA may not see triple digit returns again, the stock and its sector both have big momentum behind them heading into next year. With the stock at all-time highs, there’s nothing in terms of overhead resistance to prevent further gains.

So if the stock pulls suffers a bit of a pullback any time soon, it would likely create a solid entry point for new investors to get involved — or existing shareholders to add to their positions.