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According to Bank of America, Nvidia’s stellar stock rally is not nearly over.
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The bank reiterated its $1,500 price target this week, implying a 24% upside for the stock.
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Nvidia will continue to dominate the computer market in the next upgrade cycle, the bank said.
Nvidia shares have more room to rise even after its latest rally to record highs, as the chipmaker appears to be on track to dominate the computer market in the coming years, Bank of America said.
The bank reiterated its ‘buy’ rating on the stock in a note on Wednesday, adding that the company led by Jensen Huang remains a top pick in the IT sector. BofA strategists have a 12-month price target of $1,500 per share, which implies another 24% upside from the share price late Thursday morning.
“NVDA is best positioned to enable the $3 trillion IT industry to deliver AI services. Despite claims from rivals (AMD, Intel, custom chips or ASICs), we see NVDA with a years-long lead in performance, pipeline, incumbency, scale and developer support,” strategists said in the note.
Vivek Arya, a senior semiconductor analyst at the bank, added that he believed the stock would dominate the computer market over the next decade. That’s because the IT sector is undergoing “multi-decade infrastructure upgrade cycles” and markets are witnessing the start of the next decades-long cycle, Ayra said.
“We think spending could be somewhere between $250 billion and $500 billion a year, and Nvidia is leading the charge,” he told Yahoo Finance this week.
Nvidia stock has been unstoppable over the past 18 months, ever since OpenAI released ChatGPT and sparked an artificial intelligence arms race. Nvidia chips have essentially been the only game in town when it comes to powering the AI models that have captured the attention of consumers and Wall Street investors.
On Wednesday, the stock hit new records, with the company’s total market capitalization soaring past Apple’s to become the second most valuable company in the world.
Nvidia shares are set to undergo a 10-for-1 split on Friday, a move that could be a catalyst for further gains as a lower share price helps attract more attention from retail investors.
Bearish Nvidia calls are rare, although some forecasters doubt the company can sustain its wild growth. The stock could eventually see a sharp decline as it faces declining demand and increasing competition in the GPU market, analysts warn.
Read the original article on Business Insider
