At the largest artificial intelligence conference, GTC, held in Silicon Valley (California, USA), Nvidia presented a powerful chip aimed at artificial intelligence (AI) with which it hopes to boost its weight in this market. However, investors did not meet that expectation and after a drop of almost 3% at the beginning of operations, it only rose 1% at closing. The company’s founder and CEO, Jensen Huang, on Monday unveiled this technology, the new Blackwell computing platform, a new high-end graphics chip geared toward AI.
Nvidia: what analysts think
The stock has rallied strongly since the beginning of 2023, including a rally of more than 80% this year alone. It is essentially a matter of investors assessing the perfection of the company and therefore whether it only meets expectations in Instead of overtaking them with events like their GTC event, stocks could find it harder to continue rising,” Mold adds. The arrival of a new, more powerful chip was already priced in. But if Nvidia bulls don’t take advantage of the opportunity to drive up the price, perhaps it’s because the rally is reaching its exhaustion at the $1,000 per share mark.
In this sense, strategists highlight that this is a problem that most stock market superstars experience along the way. ” Their success means that the bar is always set at the highest level and, at times, it is impossible to surpass it,” they indicate in AJ Bell. Nvidia is the main face of AI, although competition is intensifying in the sector, putting the company under pressure to constantly innovate and stay one step ahead of the game.
“Nvidia needs to sell the new chips and software tools in bulk and get customers to demonstrate that they make a difference. As far as he is concerned, the hype is real. However, it is very difficult to maintain such high levels of growth quarter after quarter quarter,” Mold emphasizes. In any case, the company hopes to continue maintaining its leadership in the market thanks, among other aspects, to the agreements signed with some of the main players in the sector such as Amazon, Alphabet, Microsoft, and Oracle,” Bankinter emphasizes. For this reason, Wells Fargo has raised its target price to $970 per share from the previous $840 and reiterates its ‘overweight’ recommendation on the stock.
The artificial intelligence firm’s market capitalization increased by around $50 billion to $2.01 trillion.
Nvidia: the biggest stock in the world?
Analysts are attentive to the possibility that Nvidia continues to drive new increases since its performance has been key in the growth of the technology sector. Cloud capital spending is expected to increase, benefiting Nvidia, says Morningstar strategist Brian Colello.
Morgan Stanley reaffirmed its overweight rating on Nvidia and raised its price target on the stock to $795. The firm highlights strong short-term demand and sustained investment from hyper scalers as driving factors. Despite acknowledging the possibility of an overorder cycle in the semiconductor industry, Nvidia’s growing supply is expected to balance the market.
The Morgan Stanley report also highlights the upcoming B100 product cycle as a key catalyst for investment, market share, and pricing. Although customer spending is perceived as a limiting factor to growth, the B100 is anticipated to continue to be a significant driver. The price target adjustment reflects a target multiple of 35 times estimated earnings per share, against the backdrop of the rally in other computing companies with exposure to artificial intelligence.