It started yesterday, but this is the beginning of a trend that will drive some stocks higher into the earnings season.
This morning, UBS (UBS) upgraded their price target for Nvidia (NVDA) shares from $800 to $1,000. Currently, the average price target for Nvidia shares is about $950 but has been on the rise slightly in the last week.
The reason for the increase?
The same fear that you and I have: They fear being left behind in Nvidia’s next rally, and the timing couldn’t be any better.
With earnings season set to start in just a few weeks, analysts have sharpened their pencils to get to work reviewing where their outlooks and targets stand against the stocks they cover. There are several technology companies that have outperformed their estimates, Nvidia being one.
What will make this a trend is the fact that Wall Street analysts are just like us, they feel safety in numbers. In other words, if one analyst across the street is raising their target, all the others on The Street will do the same.
That trend is what drives stock prices significantly higher.
In some cases, the target prices are already high enough and aren’t likely to see adjustments.
Amazon (AMZN), for example. The stock’s average target price is $205 with the stock trading under $180. Microsoft (MSFT)? It’s average target price sits at $466, about 9% higher than the current price.
But there’s another out there that’s begging for an upgrade.
The current analyst target for IBM (IBM) shares is currently $183.
That target price is 5% lower than the current price. his suggests that this AI stock should start seeing some of the analysts covering it raise their target ahead of the April 24 earnings date.
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.