EMJ Capital hedge fund manager Eric Jackson said that the stock is expected to continue to soar until the end of this year and reach a target price of $250, with a potential 101% increase from the current level. If this expectation is met, the market cap of Nvidia, the ai chip company, will reach an astonishing $6 trillion. $NVIDIA (NVDA.US)$The target price of Nvidia's stocks by Constellation Research and Rosenblatt is $200, while Bank of America recently reaffirmed its target price of $150. Wall Street believes that although the long-term prospects for Nvidia are still optimistic, it does not mean that it will not experience a significant drop. Earlier this week, Nvidia's market cap evaporated by more than $400 billion, with a 16% decline in three days.

Jackson said that this is because Nvidia's stock is still undervalued on a valuation basis. Over the past five years, Nvidia's average forward P/E ratio has been 40 times, while after experiencing two days of adjustment, its forward P/E ratio is only 39 times. However, in the past 5 years, Nvidia's forward P/E ratio has broken through 50 times three times, and twice approached 70 times before falling back. Therefore, the market has not yet appeared this kind of crazy sentiment.

Jackson said in an interview with CNBC on Tuesday that as investors begin to focus on Nvidia's profit potential in 2025 and 2026, optimism could drive Nvidia's forward P/E ratio far above its five-year average and approach historical highs. He said, "Nvidia's growth rate is amazing, but expectations may be adjusted due to poor revenue reports, but expectations may also be exaggerated due to good news. Although the stock price has risen sharply, market optimism has not yet caught up with the expected P/E ratio."

Since the beginning of this year, Nvidia's stock price has soared 151%. Last week, the company's market value reached about $3.3 trillion, becoming the company with the highest market value in the world at one point.

Jackson said, "I think that in the second half of this year, as the market sees the strong sales of the next-generation Blackwell chips, the amazing gross margin, and the optimistic sentiment reflected in the high forward P/E ratio as Nvidia prepares to launch the Rubin chip, Nvidia's market cap could reach $6 trillion."

Jackson also believes that Nvidia has a considerable competitive advantage, which will play a role in the next few years. In addition, Jackson pointed out that it is unfounded to compare Nvidia with Cisco. During the Internet bubble period, Cisco's stock price and market value skyrocketed and then the bubble burst, hitting Cisco's stock price hard.

"This is not the Cisco of the Internet age. At that time, Cisco's forward P/E ratio reached a peak of about 136 times. However, Nvidia's forward P/E ratio is still below average, so despite Nvidia's outstanding performance in the past one or two years, it is still relatively cheap compared to past trading levels."

Even considering Nvidia's amazing gains in the past year, Jackson is not the only analyst on Wall Street who remains bullish on Nvidia.

Please use your Futubull account to access the feature.

Edited by Jeffrey