Major players are bullish on Nvidia
This week, many major stakeholders raised the investment aim of the semiconductor manufacturer, earning Nvidia a lot of spotlights. The semiconductor industry titan is establishing itself as a leader in the AI field.
HSBC analysts think the opportunity presented by artificial intelligence (AI) more than offsets previous concerns over a data center slowdown and rising inventory levels. HSBC analysts upped their recommendation for Nvidia to buy from reduce. The price target for Nvidia stock was also more than doubled by the analysts, rising from $175 per share to $355.
Analysts predict that Nvidia shares might rise by about 35% from their present levels despite a high year-to-date increase of +85%. In terms of EPS, HSBC is 12% over consensus in the fiscal year of 2024.
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In a note published on Wednesday, analysts at Bank of America also increased the company’s price target for Nvidia. Doing so, from $310 to $340 while maintaining a buy recommendation. They said that according to the company, x86 CPU sales may be surpassed by accelerator sales in 2023.
Is AI leading the buy sentiment?
Rising artificial intelligence (AI) workloads in cloud and business data centers may cause standard x86-based INTC/AMD server CPUs to lose computational power to specialized accelerators. These are NVDA GPU and bespoke processors from Broadcom/Marvell.
In addition, Piper Sandler is getting increasingly confident in the exclusive set of software tools for artificial intelligence developed by Nvidia. Nvidia chips have significant exposure in this year’s trend, generative AI.
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The AI system uses a brute-force approach to consume text, photos, and videos to produce content. The introduction of ChatGPT by OpenAI around the end of last year aroused interest in this type of AI.
Nvidia is largely responsible for the current influx of generative AI applications like ChatGPT. Nvidia conducts research and develops semiconductors that speed up computation, most notably GPUs (graphics processing units), which were first employed for the high-end visuals in video games and are now utilized to train the large-language models (LLMs) that ChatGPT relies on.
The future of quantum computing
Quantum computing, however, is a brand-new type of computer accelerator in development. Over the past few years, Nvidia has released software aimed at academics studying quantum computing.
A rising number of quantum computer operators, such as the National Institute of Advanced Industrial Science and Technology in Japan, have included CUDA Quantum into their workflows, as have quantum hardware manufacturers IonQ and start-up software developers Agnostiq and QMware.
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CUDA is the sole programming language supported by Nvidia chips. Building a superior accelerated computing system is Nvidia’s main commercial objective. Because CUDA is exclusive to Nvidia hardware, the company can maintain a grip on developers.
The outlook remains bullish
The price of Nvidia shares dropped below $274 in premarket trade on Wednesday after rising more than 2% on Tuesday. The week, however, is keeping the green candle for now.
The bulls are aiming high, as the general trend has been bullish for several weeks. The 200-day average also starts to make an upward motion. The next long-term resistance should be the $335 level last seen almost a year ago.
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The bears have a hard job on this one. Unless significant data changes the course of the chip industry, the short traders will have to rely on short-term corrections.
Nvidia 1W chart, source: tradingview.com, author’s analysis
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