Nvidia Stock Has 12% Upside, According to 1 Wall Street Analyst

Nvidia's (NVDA 0.35%) blockbuster earnings report last week is fueling more bullishness on Wall Street. HSBC analyst Frank Lee raised their price target on Nvidia to $880, representing 11.6% upside from the stock's latest closing price as of this writing.

The stock is already up 238% over the last 12 months, but that performance comes on top of a decade's worth of market-thumping returns. The company's growth story continues to get better as the demand for artificial intelligence (AI) chips is lighting a fire underneath Nvidia's data center business.

Why Wall Street remains bullish on Nvidia's prospects

Nvidia's revenue for its fiscal 2024 fourth quarter climbed 265% year over year. CEO Jensen Huang said, "Demand is surging worldwide across companies, industries, and nations."

The data center segment, specifically, raked in $18.4 billion during the quarter to make up 83% of total revenue.

However, Nvidia's growth is starting to decelerate, which could limit the stock's gains this year. The $22.1 billion top line for fiscal Q4 was up 22% from the previous quarter, compared to sequential growth of 34% in fiscal Q3. As the year progresses, Nvidia's growth may slow further as year-over-year comparisons become more challenging against last year's triple-digit growth rates.

However, analyst Frank Lee still likes Nvidia's growth opportunity. This partly stems from Nvidia's focus on emerging markets, where management expects another wave of demand to come from governments around the world as nations invest in their sovereign AI infrastructure.

Nvidia grew earnings per share by 54% annually over the last five years, and the consensus estimate projects earnings will grow 36% annually over the next five years.