With a stock price surge of 90% since the beginning of the year, the announcement of the new DGX Cloud AI chip, and the double upgrade by HSBC, the NVDA stock has recently gathered the attention of many investors.
NVIDIA has been the story of the year in the investment world, and it is hard not to be. The tech giant has been a critical player in advancing AI technologies.
Moreover, NVIDIA’s GPUs have been used to train many of the state-of-the-art deep learning models that have achieved breakthroughs in computer vision, natural language processing, and other AI applications. The company’s focus on developing specialized hardware and software for AI has made it a leading provider of solutions for the growing demand for AI processing power.
Their stock’s year-to-date upside price movement is up 90% since the beginning of 2023 and more than 140% increase since its October low. As the top gainer in the S&P500 and NASDAQ100, NVIDIA holds a prime position in the AI world as an established market leader.
The AI company has gained even more buzz lately, following a surprising change from reduce to buy recommendation by HSBC’s Head of Technology Research Frank Lee, which has led to a price increase of over 2% this Tuesday.
“We’re throwing in the towel on our previous reduction and double upgrade Nvidia to buy. We were too focused on the slowdown in datacentres, but what really surprised us is its pricing power on AI chip.”, the managing director wrote in a recent client note.
Following this announcement, Lee has lifted his prediction for the NVDA stock, hiking his per-share price target to $355 from $175. Of course, the main reasoning behind this decision is the pricing power of AI chips NVIDIA offers, which has come out as “shocking” to HSBC.
HSBC’s long-term price prediction on the NVIDIA share also appears bullish. “Overall, we believe we were too cautious on Nvidia and believe that there’s more earnings upside versus market expectations in the fiscal year 2024 and beyond.” Lee wrote in the same note.
Additionally, a recent news post by CNBC shows that Elon Musk has announced that he plans to launch TruthGPT, which he describes as the truth-centric nonprofitable display of AI. The CEO of Tesla also stated that his engineers are working behind the processors of NVIDIA, which is another move that the company may benefit from.
Following the popularity of ChatGPT, more and more companies are looking to get into the open language models and generative AI; however, NVIDIA has been one of the most substantial beneficiaries of this year for this broader push into AI. This is because of the company’s introduction of DGX Cloud, the artificial intelligence product experts believe will drastically change the game for NVIDIA.
NVIDIA DGX Cloud is an advanced AI training service designed for enterprise-level demands and capable of running on multiple nodes simultaneously. With the help of the DGX Server boxes, enterprises can increase their productivity using an AI platform that combines hardware and software and can efficiently operate across both cloud and on-premises environments.
The DGX infrastructure comes equipped with eight Nvidia H100 or A100 GPUs and a total memory of 640GB. This enhanced technology offers access to pre-trained models, optimized frameworks, and data science software libraries that have been specifically designed for accelerated performance.
The AI race is more fierce than ever, as NVIDIA’s direct competitors, in the faces of Microsoft, Amazon, Google, and Meta, are looking to develop their own better and more cost-effective chip than the one the market leader has to offer. According to CNBC, some analysts are skeptical that these new products will present a significant threat to NVIDIA, which holds the largest market share for AI chips.
With a market cap of 687.302B USD, and a current price per share trading around 278 USD, Nvidia still stands as the sixth largest stock on the NASDAQ, being outperformed only by Apple, Microsoft, Google, Amazon, and Berkshire Hathaway.
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