Nvidia shares on track to double in coming years as AI follows past tech bubbles, portfolio manager says

• Nvidia stock has a lot more room to run, according to Dan Niles.

• The Niles Investment founder compared Nvidia to Cisco before the dot-com bubble peaked.

• Nvidia stock could double in the next two years, he predicted.

Shares of Nvidia have fallen since the company reported earnings last month, but its rally is nowhere near over.

That’s according to Dan Niles, founder and portfolio manager of Niles Investment Management, who is still bullish on the AI ​​titan for the foreseeable future.

That’s because firms are still willing to pay for AI — and Nvidia appears to be following the same pattern as other firms that grew during past tech bubbles, he told CNBC in a recent interview.

“I still think you have a lot of room to spend,” Niles said of AI. “What I’m saying is, in the short term, I think you have a digestion phase that you just have to get through. I strongly believe that in the next few years, Nvidia’s revenue will be able to double again from what it is today. levels, and the stock will be able to double as well.”

Cisco, which dominated the dot-com bubble of the late 1990s, peaked at roughly 15 times its 1994 earnings, while its stock rose nearly 4,000% from that year to 2000. A low during the dot-com crash, with shares falling about 85% from peak to trough.

Nvidia stock, by comparison, is up about 1,500% over the past six years. Niles suggested this could mean the chipmaker has more upside ahead of a crash.

“I lived through ’01, ’02. These things can last longer than you ever imagined possible,” he added.

In the short term, Niles’ forecast is tops among analysts who follow Nvidia. But most of Wall Street remains bullish on the chipmaker in the coming quarters, especially as the company looks set to release its next-generation Blackwell AI chip.

Analysts have an average price target of $153.24 per share, according to Nasdaq data, which implies another 44% upside from current levels.

The chipmaker has been through a rough patch in recent weeks, with shares down 27% from their peak earlier this summer.

Investors were dismayed by the Blackwell chip’s delay, but more importantly, many are also wondering whether all of Nvidia’s customers’ billions in AI spending will turn a profit anytime soon.

Read the original article on Business Insider