Here's Why NVIDIA Stock Jumped Today

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What happened

Shares of NVIDIA (NASDAQ:NVDA) climbed 5% on Friday, as investors grew more optimistic about the chipmaker’s growth prospects. 

So what 

NVIDIA delivered impressive growth in its fiscal 2022 first-quarter results on Wednesday. Its revenue surged 84% to $5.66 billion, fueled by a 106% rise in gaming sales and a 79% jump in data center revenue. Its earnings per share, in turn, soared 106% to $3.03. 

Yet despite the impressive performance, the semiconductor titan’s stock fell 1.4% on Thursday. 

Image source: Getty Images.

However, multiple analysts raised their price targets for NVIDIA’s stock following its first-quarter report. For one, Bank of America analyst Vivek Arya boosted his price forecast from $700 to $750 and reiterated his buy rating on NVIDIA’s shares. Arya posits that the tech leader can grow its revenue and profits by 20% and 25%, respectively, until at least 2025. 

On Friday, investors appeared to reconsider the arguments posed by these analysts and take a more bullish view of NVIDIA’s expansion potential. And they bid up its stock price in kind.

Now what 

NVIDIA is producing a staggering level of growth for a $400 billion business. And its sales and earnings should continue to grow at an impressive clip in the coming years, driven by robust demand from the cloud computing and video game markets. Thus, Friday’s gains may be just the beginning of a far larger long-term move in NVIDIA’s stock price.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.