Nvidia (NVDA) shares rallied 2.6% in early trading on June 25 after Loop Capital boosted its 12-month price target from $175 to $250. The decisive upgrade reflects growing conviction in booming AI compute demand, alongside optimism around Nvidia’s new gaming GPU launch and solid supply-chain dynamics.
Price Target Hike Details
Loop Capital’s analysts argue that hyperscale cloud spending and “AI factory” compute investment could reach $2 trillion by 2028, driven by Gen AI and accelerator deployments.
- New Target: $250 (vs. prior $175)
- Rating: Buy
- Rationale: AI compute markets alone justify a potential $6 trillion Nvidia market cap
Market Reaction & Trading Activity
- Volume Spike: Trading volume on Nasdaq was 20% above its 30-day average, indicating heavy institutional participation.
- Short-Covering: Data showed a notable decline in short interest, suggesting hedge funds are reducing bearish bets.
- VWAP Test: NVDA reclaimed its daily VWAP (Volume-Weighted Average Price), a bullish signal for momentum traders.
Gaming Segment Strengthens with RTX 5050
On June 25, Nvidia announced the RTX 5050, its most affordable Blackwell-architecture card, priced at $249 and shipping in July.
- Specs: 2,560 CUDA cores, 8 GB GDDR6, 128-bit bus
- Performance: ~60% uplift over RTX 3050 at 1080p gaming benchmarks
- Market Impact: Targets upgrade cycle from legacy GTX 1650/RTX 3050 users, sustaining Nvidia’s Q3 gaming revenue growth
AI Data Center Demand Remains Robust
Nvidia’s data-center segment, now the largest revenue contributor, continues to benefit from:
- Enterprise AI Rollouts: Corporations deploying on-premises accelerated servers.
- Hyperscale Cloud Builds: AWS, Azure, and Google expanding GPU-backed instances.
- Vertical Integration: Partnerships with OEMs for turnkey AI systems.
Technical Indicators to Watch
- Relative Strength Index (RSI): Around 65, below overbought threshold of 70, signaling further room to run.
- 50-Day & 200-Day MA: Bullish “golden cross” occurred in late May, affirming upward trend.
- Support Levels: $145 marks short-term support; a hold above this level keeps the near-term uptrend intact.
Upcoming Catalysts & Risks
- Micron (MU) Earnings: After-hours report on June 25 will reveal high-bandwidth memory (HBM) demand—critical for Nvidia’s supply chain.
- Q2 Earnings (NVDA): Nvidia’s own Q2 results on August 20 could either validate current optimism or temper expectations.
- Regulatory Scrutiny: Increased U.S. export controls on advanced AI chips to China pose a potential headwind.
Investment Considerations
- Bull Case: AI secular growth, strong gaming cycle, and robust balance sheet support premium valuation.
- Bear Case: Valuation stretched at ~25× forward P/E; any slowdown in AI capex or memory shortages could trigger a pullback.
- Entry Strategy: Investors may look for consolidation near $145–150 as a tactical entry; long-term holders focus on dollar-cost averaging.