As technology companies “spend like crazy” to leverage artificial intelligence, NVIDIA is proving itself to be a major beneficiary, according to Melius Research. “Sometimes things are justifiable,” analyst Ben Reitz wrote on Monday. The largest cloud computing networks “are the foundation of demand for Nvidia's GPUs, and over the next few years they will all be spending 20% more on chips than we think.” , he wrote, referring to the graphics processing unit. The analyst reiterated his Buy rating on Nvidia and raised his price target by more than 11% to $1,125, up more than 28% from Friday's closing price of $877.35. Mr. Reitz's bullish view is related to how aggressively he argues that technology companies and other chipmakers are pursuing artificial general intelligence, the closest thing to human reconnaissance. He said Nvidia will continue to be an integral part of technology companies' pursuit of AI. NVDA YTD Mountain Nvidia Stock. ”[T]”Big cloud companies will need to spend up to 25% of Microsoft and Meta's capex on NVIDIA this year alone,” he said. NVIDIA 2024 rose nearly 76% through Monday morning as investor enthusiasm for AI continues. Nvidia posted rapid revenue growth in its latest quarterly results released in mid-February, and announced future outlook for better-than-expected first-quarter profits in 2023. May 22 But Reitzes argues that Nvidia has plenty of room to expand further, boosted by the company's recently announced latest AI GPU, Blackwell. “While the H100 continues to sell well, we are encouraged by Nvidia's Blackwell product line, which includes a richly configured system. We believe that this will be higher than expected,” the analyst said. —CNBC's Michael Bloom contributed to this report.
