NVIDIA : Success Factors Behind $1 Trillion Ecosystem

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 : Success Factors Behind  Trillion Ecosystem

Additionally, Nvidia also announced its next-generation AI supercomputer, the Nvidia DGX SuperPOD, capable of large-scale processing of trillion-parameter models with constant uptime. During his speech to more than 11,000 attendees, the manager explained the potential that this new chip can offer at a computing level and its application in software, services, robotics, medical technology, etc., and more. This platform enables real-time generative AI to be unleashed on large language models with trillions of parameters. The Santa Clara company has become the undisputed leader in artificial intelligence (AI) and one of the market drivers during 2023 and so far this year. Its upward trend has led it to rise 79% so far in 2024 on the stock market and it has rebounded 244% on the market in the last twelve months.

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 achieved another impressive milestone this Friday by becoming the third American company to reach a valuation of $2 trillion, an achievement that caused euphoria among investors after outstanding earnings. Thus, Nvidia enters a select club reserved only for technological giants such as Apple and Microsoft, consolidating itself as a leader in the artificial intelligence chip sector. In today’s session, Nvidia’s market capitalization saw a significant increase, with an increase of around $50 billion. This achievement represents a meteoric rise, as just days earlier, the company was valued below the West Coast tech titans. Now, it is approximately $190 billion ahead of Amazon and $212 billion ahead of Alphabet, Google’s parent company.

The $2 trillion milestone for Nvidia comes just after the company posted the largest daily market capitalization gain in corporate history, increasing more than $275 billion in a single day. This surprising performance led Nvidia shares to hit an all-time high of $808 on Friday. Up 67% so far this year, Nvidia stock has not only benefited the company but has also contributed to the momentum of the S&P 500 stock indices, contributing more than a quarter of its gain. year, and the Nasdaq Composite, taking them to their highest levels. It should be noted that globally, Nvidia is positioned as the fourth largest company, only surpassed by Saudi Aramco.

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.

By win11

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