Nvidia has been one of the vital hyped and carefully adopted shares in current reminiscence because the fortunes of the broader market more and more hinge on the AI chip chief.
At one level this yr, the inventory accounted for greater than a 3rd of the S&P 500’s positive aspects, and a few buyers even held watch events for Nvidia’s earnings launch.
Nvidia’s astronomical run to a $3 trillion firm has additionally been considerably divisive as many on Wall Avenue have doubted that the inventory can maintain additional positive aspects whereas others see the AI increase fueling extra upside.
That’s left buyers asking, “should I buy Nvidia stock right now, or sell it?”
Analysts at Financial institution of America have a solution: In a notice on Thursday, they reiterated their purchase score on Nvidia inventory and raised their value goal to $190 from $165, implying it might soar 38% larger from Friday’s closing value.
At $190 a share, Nvidia’s market cap would additionally explode to $4.7 trillion from $3.4 trillion immediately.
In truth, BofA is so bullish on Nvidia inventory that analysts known as it a “generational opportunity,” estimating a complete addressable market of greater than $400 billion for AI accelerators.
“AI models (demand) continue to evolve, with the cadence of new LLM model launches now increased to 3-5 times/yr per developer (OpenAI, Google, Meta, etc.), and each new major generation requiring 10-20x compute requirement to train,” analysts mentioned.
Their confidence in Nvidia has been boosted by others within the chip sector like Taiwan Semiconductor and ASML, which each lately signaled robust AI demand. BofA’s conferences with executives at Broadcom and Micron in addition to feedback from AMD have yielded comparable indications.
In the meantime, Nvidia CEO Jensen Huang additionally touted large demand for the corporate’s next-generation AI chip.
“Blackwell is in full production, Blackwell is as planned, and the demand for Blackwell is insane,” he advised CNBC earlier this month. “Everybody wants to have the most, and everybody wants to be first.”
Including to BofA’s bullish case for Nvidia is its underappreciated enterprise partnerships with the likes of Accenture, ServiceNow, Microsoft, and others in addition to its software program merchandise that assist reinforce Nvidia’s dominance in {hardware}. They mix to create a deeper general Nvidia ecosystem for AI.
Plus, Nvidia might generate greater than $200 billion in free money stream over the subsequent two years, rivaling even Apple, BofA estimated.
Earnings reviews later this month from tech giants which might be growing AI applied sciences, resembling Microsoft, Google, and Amazon, ought to present extra perception into demand. And Nvidia is because of report Nov. 20.
Whereas some on Wall Avenue have expressed skepticism on whether or not huge investments in AI are translating to the underside line, the tech sector is locked in a cutthroat race to be first on the scene with the newest advances in AI.
“We continue to see the pace of new model development increase,” BofA mentioned. “LLMs in particular are being developed for both larger size and better reasoning capabilities, which both require greater training intensity.”
