Nvidia (NVDA) shares surged on Monday following the company's announcement of a new AI chip, spreading optimism among investors and analysts. Analysts at Bank of America were more bullish, raising their price target on the chipmaker to $1,500 from $1,320 previously.
Yahoo Finance's Shauna Smith and Madison Mills break it down further, offering insight into the growing competition now that AMD ( AMD ) has announced its own AI chip.
To learn more about expert insights and the latest market trends, click here to watch this full episode of Catalysts.
This post Angel Smith
Video Transcript
Here are some trending stocks to watch this morning: We'll start with a big player: Invidia.
The company's shares rose just over 3.5% this morning after the company announced a new AI chip, Bank of America.
Following the news, the company raised its price target to $1,500 per share from $1,320, which is currently the highest forecast on the market.
Well, Shanna, not only did we have news from NVIDIA this morning, but A MD is also unveiling new chips at this tech conference this week, and A MD is the closest thing NVIDIA has to a competitor, but I just pulled out some statistics that show how far ahead NVIDIA is of A MD.
The company has increased its AI chip sales by $100 billion over the past year.
MD is expected to make 4 billion.
So you can't really compare.
In comparison, it ranks 125th.
that's right.
We're talking about the overwhelming dominance NVIDIA has had in the market so far.
And then we'll talk about new chips and what we have in development.
Clearly, there was a lot of excitement surrounding what we heard from Jensen Wong over the weekend.
So we are once again seeing NVIDIA, which was already up over 100-20 percent heading into the weekend, rise another 3.5-4 percent today.
We talked about the path to growth, and I think a lot of that optimism is reflected in the new price target announced by Bank of America earlier this morning, an increase from $1,320 to $1,500.
And why are they being bullish here, given where we are in this space?
Well, they're still saying we're in the early stages of a cycle where Sector A is winning and free cash flow is strong. They think that in the short term, it might be a bit of a stretch, but the semiconductor cycle is going to continue for another 12 to 18 months.
Again, if you factor in the 1500 calls, that's roughly a 35-37% upside from current levels.
So, going into the day, many analysts are still very bullish and investors are clearly excited about some of the announcements that came out over the weekend.
Still, when it comes to these limits, the reality is that we are still very early in the AI adoption and investment cycle.
