Nvidia is one of the most hyped and closely watched stocks in recent memory, as the fate of the broader market increasingly hinges on the leader in AI chips.
At one point this year, the shares accounted for more than a third of the S&P 500’s profits, and some investors even held watch parties for Nvidia’s earnings releases.
Nvidia’s astronomical run to a $3 trillion company has also been somewhat divisive, as many on Wall Street have doubted the stock can sustain further gains, while others see the AI boom fueling more upside potential.
That leaves investors wondering, “Should I buy or sell Nvidia stock now?”
Analysts at Bank of America have the answer: In a note on Thursday, they reiterated their buy rating on Nvidia stock and raised their price target from $165 to $190, implying the price target could rise 38% higher than Friday’s closing price.
At $190 per share, Nvidia’s market cap would also explode from $3.4 trillion today to $4.7 trillion.
In fact, BofA is so bullish on Nvidia stock that analysts called it a “generational opportunity,” estimating a total addressable market for AI accelerators at more than $400 billion.
“AI models (demand) continue to evolve, with the frequency of new LLM model launches now increased to 3-5 times per year per developer (OpenAI, Google, Meta, etc.), and each new major generation 10-20x computing power required requirement to train,” analysts said.
Their confidence in Nvidia has been bolstered by others in the chip sector, such as Taiwan Semiconductor and ASML, both of which recently signaled strong demand for AI. BofA’s meetings with executives at Broadcom and Micron, as well as comments from AMD, have yielded similar clues.
Meanwhile, Nvidia CEO Jensen Huang also praised the huge demand for the company’s next-generation AI chip.
“Blackwell is at full production, Blackwell is going as planned and demand for Blackwell is crazy,” he told CNBC earlier this month. “Everyone wants to have the most, and everyone wants to be first.”
Further strengthening BofA’s positive case for Nvidia are its underappreciated business partnerships with companies like Accenture, ServiceNow, Microsoft and others, as well as the software products that help cement Nvidia’s dominance in hardware. They combine to create a deeper overall Nvidia ecosystem for AI.
Moreover, Nvidia could generate more than $200 billion in free cash flow over the next two years, which even Apple could match, BofA estimates.
Earnings reports later this month from tech giants developing AI technologies, such as Microsoft, Google and Amazon, should provide more insight into demand. And Nvidia will report on November 20.
While some on Wall Street have expressed skepticism about whether massive investments in AI will translate into profits, the tech sector is in a cut-throat race to be first on the scene with the latest advances in AI .
“We continue to see the pace of new model development increase,” BofA said. “LLMs in particular are being developed for both larger size and better reasoning ability, both of which require greater training intensity.”
This story originally appeared on Fortune.com
