While Nvidia and AMD stock prices have continued to soar and hit new highs over the past year, Wall Street is still betting that their stock price gains will continue.
On Tuesday Eastern Time, Wall Street analysts raised the target prices of these two chip giants, indicating Wall Street's continued optimism about the demand prospects for artificial intelligence chips.
Wall Street institutions raise Nvidia and AMD target prices
On Tuesday Eastern Time, Wall Street investment banks Barclays and KeyBanc analyst teams raised their target prices for AMD and Nvidia.
Barclays analyst Tom O'Malley's team has raised AMD's stock price target from $120 to $200. AMD's stock price surged 8.31% to $158.74 on Tuesday, indicating that Barclays predicts it still has nearly 26% room for growth.
KeyBanc analysts have raised AMD's target price from $170 to $195 and Nvidia's target price from $650 to $740. NVIDIA's stock price rose 3.06% on Tuesday, reaching a historic high of $563.82.
Nvidia and AMD stock prices have risen significantly since the beginning of 2023
Driven by the wave of artificial intelligence, Nvidia and AMD achieved astonishing gains of 239.24% and 127.59% respectively last year, becoming one of the biggest winners in the US stock market last year.
In the first half of this year, although the continuous rise of the US stock market has come to a halt, Nvidia and AMD stock prices have remained strong, achieving gains of 13.85% and 7.69%, respectively.
As of now, the median target price given by 53 Wall Street analysts tracking Nvidia stocks is $625, slightly lower than the $627.50 a month ago, and their current collective recommendation is to buy.
Meanwhile, the median target price of 47 Wall Street analysts tracking AMD stocks is $145, higher than $130 a month ago, and they collectively recommend buying the stock.
The AI chip market will begin to open up this year
Barclays analysts stated in investor reports that although Nvidia currently dominates the advanced artificial intelligence chip market, AMD is expected to gain some market share this year as it delivers more self-produced chips to corporate customers.
Last December, AMD released the new MI300 series AI chips in an attempt to challenge Nvidia's dominant position in the field of artificial intelligence chips.
AMD claims that the MI300 series chips perform better than Nvidia's H100 graphics cards and have received orders from Microsoft, Oracle, Meta, and OpenAI.
Technology analyst Beth Kindig predicts that the shipment of MI300 chips this year will reach 300000 to 400000 pieces, and the shipment of Nvidia H100 will reach 1.5-2 million pieces.
Barclays analysts wrote, "Due to supply constraints, customers often use the entire Nvidia platform to gain priority shipments of accelerators." They added that 2024 will be the "year when the artificial intelligence market begins to open up" as other chip manufacturers such as AMD gain market share.