Although Nvidia's stock price has risen by over 350% since the beginning of 2023, market confidence in Nvidia continues to grow.
On Friday Eastern Time, Nvidia's stock price surged 5% to a new high of $661. As Nvidia's stock price continues to hit new highs, Bank of America has raised Nvidia's target price and believes that global demand for artificial intelligence is still in its early stages, and Nvidia's stock valuation remains "charming".
Bank of America raises Nvidia's target price
On Friday Eastern Time, Bank of America raised Nvidia's target stock price from $700 per share to $800, reiterated its buy rating, and designated it as its preferred stock.
Nvidia will officially release its financial report on February 21st. Analysts say they expect Nvidia to achieve significant revenue growth of 3% to 5% in both its fourth quarter financial report and the next quarter, with a growth of $500 million to $1 billion.
They pointed out that the decrease in revenue growth is partly due to restrictions on the Chinese market, and partly due to the transitional effect before the official release of the B100 accelerator in the second half of next year.
The analyst wrote, "Although the 3-5% increase appears pale and weak compared to the 10%/22% increase in previous quarters, which may disappoint some bulls, a more restrained pace will also be seen as creating a more fertile soil for sustained growth in 2025 and beyond."
Bank of America predicts that Nvidia will maintain its leading position in the field of artificial intelligence reasoning:
"We predict that the data center artificial intelligence accelerator market will grow from $43 billion in 2023 to over $160 billion in 2025, possibly with increased contributions from training/inference. We expect Nvidia to have a 90% share in training chips and a 50% share in inference chips. So far, most of Microsoft's success in AI has been in AI inference, possibly primarily on Nvidia's GPUs."
The demand for artificial intelligence will continue to soar
Analysts also indicate that the demand for artificial intelligence is still in its early stages.
This week, Meta, Microsoft, Amazon, and Alphabet all emphasized in their latest financial reports that artificial intelligence spending is their top priority as these tech giants seek to consolidate their position in this rapidly growing industry. This is naturally good news for Nvidia.
In addition, although large technology giants are leading in AI spending, many other companies are just beginning to develop and implement their AI roadmaps, which should continue to generate demand for Nvidia's AI products in the coming years.
Bank of America stated that artificial intelligence is still in its "early stages", and "results from top cloud clients in the United States indicate a solid drive for spending on artificial intelligence."
Analysts added, "The large-scale adoption of artificial intelligence by enterprises has not yet begun and will become more substantial in 2025. Nvidia benefits from its widespread availability on public clouds and unique partnerships with companies such as ServiceNow, SAP, VMWare, Dell, and HP."