Nvidia stock to $145? 1 Wall Street analyst thinks so.

Nvidia (NVDA 0.47%) investors have been in for a wild ride this year. The artificial intelligence (AI) chipmaker is up as much as 174% in 2024 as excitement over the rapid adoption of generative AI captivates Wall Street and Main Street alike. With these gains, however, has come extreme volatility as the value of this emerging opportunity remains uncertain.

In recent weeks, the stock has reversed course, falling as much as 25%. Concerns about the state of the economy have called into question the staying power of AI and how much Nvidia can grow from here. Stocks have recovered much of those losses, but questions remain.

One analyst thinks Wall Street is setting its sights too low.

Image source: Getty Images.

HSBC says Nvidia is a buy

HSBC analyst Frank Lee recently reiterated his buy rating on Nvidia stock and raised his price target to $145. This represents a potential upside for investors of 14% from Tuesday’s closing price. The analyst believes Nvidia will report sales of $30 billion for its fiscal second quarter, with revenue of $33 billion and $36 billion in subsequent quarters.

The analyst notes that data center modernization spending is on track to continue through 2025, driven by strong demand for generative AI.

The analyst has obviously done his homework. The three largest cloud infrastructure providers, Amazon Web Services (AWS), Microsoft Azure, and AlphabetIts Google Cloud, who are Nvidia’s biggest customers, have all been very clear about their plans to increase their capital spending to meet the growing demand for AI. As the gold standard for AI processing, Nvidia is likely to be the beneficiary of much of this spending.

Additionally, the company’s biggest partners and rivals are reporting strong sales, suggesting that Nvidia’s results will be just as robust.

If the analyst’s calculations are correct, Nvidia’s revenue will top $125 billion in fiscal 2025, more than double the $61 billion it earned last year — and mark its second straight year of growth three digits.

That’s why Nvidia stock is a buy.