Market research firm Jefferies has upgraded its forecast for Nvidia’s stock price to $150 per share, up from a prior estimate of $135. The upgrade is based on optimism stemming from recent data gathered during a trip to Asia and potential advancements in the artificial intelligence (AI) industry.
Nvidia’s updated valuation mirrors the potential surge in demand for cutting-edge graphic processing units (GPUs) and the burgeoning adoption of AI technologies. With this elevated forecast, investors expect to see substantial benefits, further solidifying Nvidia’s place as a frontrunner in the AI race.
Meanwhile, the AI market shows signs of stabilizing. Nvidia and Broadcom maintain steady performances, AMD and Marvell endure investor doubts, and Intel offers a diverse product portfolio to retain a solid position despite stiff competition. Furthermore, newcomers Graphcore and Cerebras Systems are creating application-specific AI solutions, reshaping the competitive landscape.
Jefferies advocates for consistent scrutiny of these new players, suggesting they could reshape the AI chip market significantly. The future of AI, however, remains uncertain, influenced by changing government regulations, economic trends, and technological advancements. Therefore, investors are advised to monitor these trends closely.
Looking ahead, Jefferies plans an “AI Bus Tour” to garner crucial insights from industry leaders, including Nvidia’s management. The tour aims to uncover the potential impact of the GB200 NVL platform switch on the broader AI market. An upcoming shift to this platform represents a substantial evolution in Nvidia’s AI technology, and its rollout is eagerly monitored within the industry.
To evaluate the likely outcome of this switch, Jefferies will conduct an in-depth visit with Nvidia, a company at the forefront of AI innovation.
Forecast hike for Nvidia stock based on AI advancements
The transition’s outcomes could potentially set new global benchmarks for AI development strategies.
A mid-May visit to Asia has bolstered Jefferies’ faith in Nvidia. Notable were substantial chip production expansions slated for completion by late 2024. Furthermore, industry analysts cite Nvidia’s innovative strategies and pioneering technologies, such as the planned acquisition of Arm, as key growth drivers.
Despite the positive projections, uncertainties stemming from geopolitical tensions, supply chain disruptions, and competitive dynamics must be factored in. Nevertheless, many are confident that Nvidia, with its performance history and tenacious market position, can navigate these potential obstacles.
Based on these findings, Jefferies upgraded its production estimates for Nvidia’s GB200 NVL, expecting 60,000 units rather than the previously predicted 40,000. Such a surge emphasizes Nvidia’s evolving production strategy and increased output of high-value NVL versions.
Even with this bullish forecast, Jefferies acknowledges that further growth potential exists for Nvidia. The current production estimates, they say, might be just a hint of what the future holds for Nvidia’s groundbreaking technology.
