Nvidia (NVDA) saw a significant rise in its stock prices on Monday, as investment bank Goldman Sachs increased its price target for the company, which makes chips for artificial intelligence (AI).
Analyst Toshiya Hari raised his forecast for Nvidia stock over the next 12 months from 625 to 800, maintaining his buy rating and keeping Nvidia on the firm’s “conviction list” of top stock options.
Nvidia stock climbed 4.8% to close at 693.32 on the stock market that day, reaching a record high of 694.97 earlier in the session.
In a note to clients, Hari expressed his belief that Nvidia will benefit from a strong demand for AI servers and an improving supply of GPU (graphics processing unit) chips.
He also raised his earnings estimates for Nvidia for fiscal 2025 and 2026, with Nvidia’s fiscal 2024 ending on Jan. 28.
Continued Spending on AI Data Centers
Hari stated, “We no longer assume a drop-off in data center revenue in second-half calendar year 2024 and instead model consistent growth through first-half calendar 2025, driven by continued spending on Gen AI infrastructure by the large cloud service providers, a broadening customer profile, and multiple new product cycles.”
Hari pointed to recent reports from Meta Platforms (META), Microsoft (MSFT), and Super Micro Computer (SMCI) that support his bullish view on Nvidia.
Hyperscale cloud service providers like Meta continue to heavily invest in AI-powered data centers, he noted. Additionally, Meta and Microsoft are displaying early signs of AI monetization for their services, according to Hari.
Nvidia’s Dominance in AI Chips
Meanwhile, Hari believes that Nvidia is likely to outperform its rival, Advanced Micro Devices (AMD), in the AI chip market.
“From a competitive standpoint, although AMD is making good progress with its MI300 platform, we believe Nvidia will remain as the industry gold standard for the foreseeable future given its robust hardware and software offerings and, importantly, the pace at which it continues to innovate.”
The next significant event for Nvidia stock will be the company’s fiscal fourth-quarter report, which is scheduled to be released on Feb. 21.
Nvidia stock is present on five IBD stock lists: IBD 50, Leaderboard, Big Cap 20, Sector Leaders, and Tech Leaders.
On Jan. 8, Nvidia stock broke out of a flat base at a buy point of 505.48, according to IBD MarketSmith charts. This progress beyond the 20% to 25% profit-taking threshold from its breakout comes with the application of the eight-week hold rule.
For more stories on consumer technology, software, and semiconductor stocks, you can follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz.
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