Considering Investments in Nvidia and DexCom? Two Wall Street Growth Stocks that can turn the tide!
While this year's upward market trend has benefited numerous companies, not all stocks share the same growth prospects. Wall Street is particularly bullish on two stocks that have recently undergone stock splits
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In 2023, Wall Street reversed its previous downward trajectory, witnessing a resurgence in many stocks that had previously suffered losses. Major market indices all saw gains of at least 20% from their respective lows, though some of these gains have since receded. While some remain optimistic, touting the onset of a new bull market, others are cautious, waiting for the market to reach new highs to confirm this trend.
Despite the contrast with the previous year, some investors find inspiration in companies that have undergone stock splits in recent years. Although stock splits do not alter a company's intrinsic value, they often follow periods of robust financial and stock performance.
While this year's upward market trend has benefited numerous companies, not all stocks share the same growth prospects. Wall Street is particularly bullish on two stocks that have recently undergone stock splits:
1. Nvidia:
• Nvidia, despite having already gained approximately 200% this year and a staggering 11,000% over the past decade, continues to thrive. This is primarily due to the generative AI boom, largely driven by Nvidia's advanced processors, which has led to a surge in demand for the company's products.
• The company's financial results tell a compelling story. In its fiscal 2024 second quarter, Nvidia achieved record revenue of $13.5 billion, marking a 101% increase year-over-year. Diluted earnings per share (EPS) also saw a remarkable surge of 854% to $2.48.
• CEO Jensen Huang attributed this success to the adoption of generative AI, and Nvidia anticipates another record-breaking quarter in Q3, projecting all-time high revenue of $16 billion.
• Wall Street shares this optimism, with consensus estimates forecasting full fiscal year revenue of $54.6 billion, more than double the previous record set in fiscal 2022. As a result, the average price target on the stock is $628, implying an additional 40% upside over the next 12 to 18 months. Some analysts are even more bullish, with a price target of $1,100, suggesting a potential 123% increase from the current price.
2. DexCom:
• DexCom, which delivered returns exceeding 1,170% over the past decade, has faced challenges in 2023, with its stock declining by 19%. Despite its solid financial and operational performance, the continuous glucose monitoring (CGM) specialist has been affected by a recent trend in weight loss medications.
• Novo Nordisk's Ozempic and Eli Lilly's Mounjaro, both GLP-1 agonist medications, have demonstrated dramatic weight loss effects, raising concerns that the demand for CGM devices may decline.
• However, DexCom reports that CGM usage actually increases among patients taking GLP-1 medications, countering these worries.
• Financially, DexCom has continued to perform well, with second-quarter revenue growing by 25% year-over-year to $871 million, and EPS surging by 133% to $0.28.
• Wall Street remains optimistic, with consensus estimates projecting full fiscal year revenue of $3.54 billion, a 22% increase, and an average price target of $143, implying a further 51% upside over the next year.
• Some analysts are even more enthusiastic, with a price target of $160, suggesting a potential 69% increase from the current stock price.
