Bernstein reaffirmed its Buy on Nvidia today, $400 target, roughly 75-88% upside from Tuesday's $229 close depending on which close you measure against. Analyst Stacy Rasgon has an 88.71% historical hit rate on his targets, so this isn't a name throwing out numbers for headlines.
Here's what actually makes this call interesting, tbh, and it connects to something worth flagging first.
NVDA's been the worst-performing stock among its own AI chip peers this year, up only around 20%, while AMD, Intel, and Micron have all posted triple-digit gains. Same sector, same AI boom, wildly different stock outcomes. Rasgon's note is basically explaining why that gap exists, and he's arguing it's the opportunity, not a warning sign.
The core argument is valuation compression, not new hype, honestly. Nvidia trades around 17 times next-12-month earnings estimates right now, against a five-year average closer to 35 times. That's not the price falling, that's the multiple getting cut roughly in half while the business kept growing underneath it. A stock can get objectively cheaper relative to its own history even while climbing in absolute price, if earnings estimates rise faster than the share price does.
That's the real mechanism behind why NVDA looks like a laggard against AMD and Intel this year, tbh. It's not that Nvidia's growth slowed, cloud provider order backlogs reportedly exceed $2 trillion, and the company's targeting up to $40 billion in revenue per gigawatt with its upcoming Vera Rubin systems. It's that the market re-rated how much it's willing to pay for that growth, even as the growth itself kept accelerating.
Worth being fair to the skeptical side too. This call is landing right as renewed public debate about slowing advanced AI model development is circulating, and that debate directly threatens the entire premise, sustained compute demand. Rasgon's own framing acknowledges this, honestly, the bet only pays off if capacity constraints keep easing and hyperscalers keep converting backlog into actual delivered revenue, not just contracted promises.
Not treating an 88% hit-rate analyst as automatically right here. But this specific call is worth separating from noise, tbh. It's a structured argument about multiple compression meeting continued growth, not just another bullish headline layered onto an already-loved stock.
