(Part-1) AI's "Magnificent Seven" ruled the stock market in 2023. Wall Street predicts 20% growth this year.

Not only did the market's top tech stocks all beat the Nasdaq Composite and the S&P 500 last year, but three of those seven equities even doubled in value. Nvidia , a semiconductor manufacturer that has positioned itself as a frontrunner in the AI revolution, outperformed all of its competitors. The bottom line explains why Nvidia's stock price surged 239% in the past year.

The company's sales and profitability surged last year, solidifying its position as a clear winner during the early phases of the generative AI boom. Soaring prices for its in-demand accelerators and graphics processing units (GPUs) contributed to bumper earnings, which in turn resulted to a 206% increase in revenue compared to the same quarter last year. 

Compared to the same quarter last year, the company's net income on a GAAP basis increased by about 50%, from $680 million to $9.24 billion, a more than thirteenfold increase.

Although such increases should have stretched Nvidia's valuation, the company actually seems cheaper than it has in a long time due to the soaring earnings. 

The stock is trading at a price-to-earnings ratio of 26 based on fiscal year forecasts that conclude in January 2025. However, these estimates are subject to revision higher in the future months due to Nvidia's previous quarters of exceeding expectations.

You are not alone in your optimism over Nvidia stock. In 2024, the stock is expected to grow 20% by the average Wall Street analyst, according to TipRanks. Additionally, all 36 analysts who are following the stock anticipate a gain for this year. As of this writing, 32 analysts have recommended buying the stock, while 4 have said to keep off.

The reasons why Nvidia's stock price might continue to rise The latest product announcements made by Nvidia at the CES trade show should be enough to convince you that the stock price may continue to rise.

The new products and collaborations introduced by the firm cover a wide variety of semiconductor categories and sectors. In sum, the announcement demonstrated that the corporation intends to maintain its current pace of artificial intelligence advancement and even increase its lead.

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