OpenAI’s ChatGPT quickly gained popularity after its November 2022 launch. The AI (Artificial Intelligence)-powered chatbot has seen rapid adoption while its use case is growing. Given its popularity, top tech giants, including Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG), have poured in billions to capitalize on the viral trend. However, Nvidia (NASDAQ:NVDA) has become a top investment for investors.
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But before digging deeper into NVDA, it’s important to highlight that ChatGPT is now more powerful and predictable as the company launches a new version of this viral chatbot. Thanks to the latest version, the viral chatbot can now analyze images and handle much larger blocks of text.
According to a Wall Street Journal report, Martin Casado, General Partner at Andreessen Horowitz, a venture capital firm, said that ChatGPT-like generative AI tech could significantly cut the costs of producing text, images, and other creative projects. This implies that ChatGPT-like technology will likely witness solid demand in the coming years, providing a solid investment opportunity for investors.
Nvidia Leads the Race
While tech giants are investing billions in introducing AI-powered chatbots like ChatGPT, Nvidia, with its AI chips, has already taken the lead. Its CEO, Jensen Huang, highlighted during the Q4 conference call that the adoption of AI is at an inflection point, and NVDA has emerged as “the operating system of AI systems today.” It’s worth highlighting that the AI computing infrastructure is concentrated with Nvidia.
With the increased number of firms planning to incorporate ChatGPT-like tools into their businesses, NVDA is poised to deliver stellar financial results and benefit from solid demand.
Christopher Rolland of Susquehanna sees ChatGPT as a tailwind for NVDA and expects the company to outperform peers owing to the AI momentum.
What’s the Prediction for NVDA Stock?
NVDA stock has received 24 Buy, six Hold, and two Sell recommendations for a Moderate Buy consensus rating. It has rallied about 65% year-to-date. Meanwhile, analysts’ average price target of $256.59 implies 6.63% upside potential.
Bottom Line
The broad adoption of AI and Nvidia’s strong competitive positioning in the AI space bode well for growth. However, macro uncertainty and weak demand for general-purpose CPU infrastructure could restrict NVDA’s growth in the short term.
