We're raising our price targets on The Investing Club's only “own it, don't trade it” stocks — Nvidia and Apple — two megacap tech names with more room to win this year. Nvidia We're raising our Nvidia price target to $150 per share from $120 – representing an increase of more than 20% from Monday's close. The artificial intelligence giant, which briefly became the most valuable US company a few weeks ago, has been on a bit of a boil lately. On Tuesday, it was just hanging on to a $3 trillion market cap. For investors without Nvidia exposure, the stock on Tuesday was near one of the three potential buy levels we identified last week. It dipped briefly below intraday Monday. We're considering an upgrade from our pending Pullback 2 rating given the stock's nearly 12% decline from last month's all-time intraday high of $141 through Monday's close. However, in 2024 alone, the stock is up more than 145% — far from our best performer this year. But given the run, we're reiterating our pullback 2 rating for now. NVDA 5Y Mountain Nvidia 5 Year Strongest Since Oct 2022 Shares are as strong as Nvidia shares since closing low of $11.23 each – up more than 1,000% since then – We see more strength ahead . Catalysts include continued demand for the company's AI hardware solutions as well as upside potential from its growing service offerings. After gaining ground following an earnings increase in May and last month's 10-for-10 stock split, the main concern behind the stock's recent decline has been whether Nvidia's clients can hold back on hardware spending as The chipmaker moves from its Hopper suite to the new Blackwell architecture. . This concern is misplaced because industry research continues to indicate that this will not happen. The need for high-speed computing is huge and the majority of the world's data centers were not built from the ground up with AI workloads in mind. As a result, we believe that large and small companies are in the early stages of capital investment. Nvidia's services revenue is not yet material to earnings, but we see several avenues for growth. Nvidia has solutions for several key industries, including healthcare and autonomous vehicles. We believe the addressable markets for these verticals are large and only getting larger. Healthcare revenue at Nvidia has already exceeded the $1 billion run rate. The company is also proving to be a key partner for many of the world's auto industry OEMs (Original Equipment Manufacturers). Nvidia is expected to share in the revenue stream associated with self-driving vehicle subscriptions. In 2021, at Nvidia's Investor Day conference, founder and CEO Jensen Huang gave an example of how big the auto market could one day become. “100 million cars are sold a year and that's the whole opportunity for chips, 100 million cars a year.” At the time, Jensen hypothesized that if every car had $1,000 worth of Nvidia hardware, it was a $100 billion opportunity. “However, those cars drive 10 trillion miles,” he estimated. If Nvidia were to receive $1 per mile as part of the services subscription, he predicted, “that's $10 trillion — and so, that kind of gives you an idea of the economics involved.” However you want to slice it, when we consider that current revenue estimates for Nvidia are $120 billion this fiscal year, with only $1.4 billion coming from automotive, it's clear that this segment alone has the potential to materially affect total revenues in the future. The decade Bottom line: We expect growth to continue as a result of the now-shipping Blackwell chip platform. However, we see considerable opportunity for even greater growth as we take a long-term view of these new service-based opportunities. Apple We are also raising our price target for Apple from $220 to $240 per share. But we are reiterating our 2 rating with the stock. Stocks had a rough start to the year. But it bottomed out in mid-April and found its footing. Then better-than-feared earnings in early May lifted the stock. It got another boost in June after the company unveiled its artificial intelligence strategy. Like other tech stocks, Apple recently declined. But unlike Nvidia, this weakness was short-lived. AAPL 5Y Mountain Apple 5 Year We like what we saw at Apple's annual Worldwide Developers Conference (WWDC) and continue to believe that Apple's new AI offering is nothing less than last year's iPhone 15 Pro. Failure to take advantage provides a setup for either of these. Strongest refresh cycle we've seen in years. Keep in mind, we haven't even seen what new features the iPhone 16 will have besides AI tools. New iPhone launch events usually take place in September. Beyond the hardware upgrade cycle, we think the introduction of generative AI and integrating it more deeply with consumers' personal devices – in a way only Apple can do – will open up new service opportunities, leading to It will be a major part of the income. Coming from this recurring, high-margin part of the operation. Bottom line: We think the introduction of Apple Intelligence—as well as what could become a factor in the reduction of spatial computing (mixed reality vision pro headsets) devices (and prices)—represents the start of a new generation. apple. (Jim Cramer's Charitable Trust is long NVDA, AAPL. See here for a complete list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you'll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling stocks in his charitable trust portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. The Investing Club information above is subject to our terms and conditions and privacy policy, along with our disclaimer. No formal obligation or duty exists, or is created, by reason of your receipt of any information provided in connection with Investing Club. No specific results or profits are guaranteed.
HANGZHOU, CHINA – JUNE 3, 2024 – NVIDIA logo and Apple logo are pictured in Hangzhou city, Zhejiang province, China, June 6, 2024. On June 5, Eastern time, Nvidia's stock market value surpassed $3 trillion, officially surpassing Apple. To become the world's second largest technology company by market capitalization and market value. It is worth noting that in just 3 months, Nvidia's market value increased from $2 trillion to $3 trillion. (Photo credit should read CFOTO/Future Publishing via Getty Images)
C Photo | Future publications Getty Images
We're raising our price targets on Investing Club's only “own it, don't trade it” stocks. Nvidia And apple – Two mega-cap tech names with more room to win this year.