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Nvidia (NVDA) shares closed higher on Wednesday following reports the chip company is considering a major expansion in Israel – already home to its largest research and development hub outside the U.S.
According to sources that spoke with Reuters on condition of anonymity, the company wants to set up a new campus in northern Israel – and has dozens of municipalities vying for the project.
Nvidia’s stock price surge Wednesday morning pushed its market cap past $4 trillion – making it the only company to have achieved that milestone.
What Israel Expansion Means for Nvidia Stock
Nvidia’s potential expansion in Israel could prove meaningfully positive for investors as the region is “extremely important to the AI era,” according to one of the Reuters sources.
Such a move could strengthen the company’s largest R&D hub outside the U.S., support future chip innovation, and position NVDA to meet the ever-rising demand for AI infrastructure.
Moreover, with dozens of municipalities competing to host the new campus, Nvidia has leverage to optimize costs and logistics.
All in all, the expected investment will reinforce the titan’s dominance in the global artificial intelligence arms race and boost investor sentiment to drive NVDA share price up further in the coming months.
NVDA Shares Are Trading at a Reasonable P/E
Bernstein analyst Stacy Rasgon remains convinced that hitting a $4 trillion valuation is “not the end” of NVDA’s growth story.
According to Rasgon, it makes sense that Nvidia achieved what no other company has in history since it’s “at ground zero creating one of the largest technological inflections of our lifetime.”
Rasgon sees further upside in Nvidia shares to $185 (up another 14% from here) as its massive run in recent months still hasn’t pushed the price-earnings (P/E) multiple into the absurd territory “because the company keeps earning more money.”
NVDA stock has traded at a P/E ratio as high as 60x, versus just under 40x at the time of writing, the analyst revealed in an interview with Yahoo Finance on Wednesday.
Wall Street Has a ‘Strong Buy’ Rating on Nvidia
Note that Bernstein is not the only firm that’s keeping bullish on Nvidia stock despite its meteoric rally since early April.
The consensus rating on NVDA shares currently sits at “Strong Buy” with the mean target of about $177 indicating potential upside of some 8% from current levels.
