Home Finance Nvidia shares could rise another 38%, according to Wall Street Firm

Nvidia shares could rise another 38%, according to Wall Street Firm

by trpliquidation
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Nvidia shares could rise another 38%, according to Wall Street Firm

Nvidia (NASDAQ: NVDA) has been in scintillating form in the stock market in 2024, gaining nearly 180% at the time of writing. This is due to the robust growth the company has achieved in recent quarters due to strong demand for its graphics cards deployed in artificial intelligence (AI) servers.

The average price target for the next twelve months of $150 (according to 64 analysts covering Nvidia) indicates that there is not much upside potential, as it points to gains of only 9% from current levels. However, Bank of America recently raised their price target on Nvidia from $165 to $190, which would translate to a 38% gain from current levels.

Let’s take a look at why that was the case and see if this is high-flying semiconductor stock could rise above consensus estimates and deliver stronger earnings going forward.

Bank of America analysts have raised their price target on Nvidia due to the company’s dominant position in the AI ​​chip market. They believe the chipmaker could continue to control an estimated 80 to 85 percent share of this space, which puts the company in a great position to capitalize on a $400 billion market opportunity.

Bank of America’s optimistic stance also stems from the arrival of Nvidia’s new generation of Blackwell processors, as well as a stellar earnings report from the key vendor TSMC and Nvidia CEO Jensen Huang’s claim that demand for the upcoming Blackwell cards is “insane.” It’s worth noting that Nvidia management pointed to the company’s August date earnings conference call that it is on track to sell several billion dollars worth of Blackwell processors in the fourth quarter of the current fiscal year.

More importantly, demand for Blackwell chips is expected to exceed supply by 2025. That won’t come as a surprise, as multiple cloud computing giants are lining up to deploy Nvidia’s Blackwell processors. Nvidia management pointed this out in March this year Amazon Web services, Dell Technologiesgoogle, Meta, MicrosoftOpen AI, Oracle, Teslaand xAI are among the many companies expected to adopt the Blackwell platform.

That’s not surprising given the huge jump in performance that Nvidia’s Blackwell platform is expected to deliver compared to previous-generation Hopper chips. More specifically, Nvidia promises four times higher AI training performance and thirty times higher AI inference compared to Hopper. In fact, Nvidia claims that Blackwell can train large language models (LLMs) at “up to 25x less cost and energy consumption than its predecessor.”

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