$NVDA Nvidia will hit a $6 Trillion Valuation by the end of the year as investors start to realize how cheap the stock is, Hedge-fund manager says
Matthew FoxJun 26, 2024, 12:51 PM EDT
Nvidia stock is still cheap based on a forward price-to-earnings multiple, a hedge-fund manager says.
Eric Jackson expects Nvidia stock to hit $250 a share by year-end, doubling from current levels.
Its market cap could hit $6 trillion, bolstered by strong chip sales and investor euphoria, he said.
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Nvidia stock is set to continue its wild rally through the end of the year, according to the hedge-fund manager Eric Jackson of EMJ Capital.
Jackson expects Nvidia stock to hit $250 by the end of the year, representing an upside of 101% from current levels.
Such a rally, if it materializes, would value the AI-chip company at a stunning $6 trillion.
And it's all because Nvidia stock is still cheap on a valuation basis, according to Jackson.
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"Over the last five years, Nvidia's average look forward price-earnings multiple has been 40 times," Jackson told CNBC on Tuesday. "Yesterday, after this two-day correction, it was 39 times forward price-earnings. But there have been three times in the last five years where it's had a look forward price-earnings multiple of over 50X, and two times in the last five years where it's gotten just about to 70X, and then it pulled back. So we just haven't seen that euphoria yet."