You’re not really a Wall Street analyst these days if you don’t come to work with a new price target for Nvidia (NASDAQ:NVDA). The speed at which the stock has been piling on the gains – all 244% of them over the past year, 82% of those in 2024 – has necessitated frequent model updates, and the latest to join in is Bank of America’s Vivek Arya.
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Arya, whose success at stock forecasting has placed him in 12th spot amongst the thousands of Street analysts, has now raised his price objective to $1100 (from $925), implying the stock will gain another 25% in the year ahead. Naturally, the 5-star analyst’s rating stays a Buy. (To watch Arya’s track record, click here)
The latest model tweak comes ahead of the semi giant’s GPU Tech Conference (GTC), which kicks off on Monday (March 18th-21st). Investors will obviously be keen to find out the latest developments taking place at Nvidia and so will Arya, who has a list of some the things to look out for.
The analyst expects GTC to showcase: “1) Rising impact of genAI, omniverse/digital twins across a wide range of end-markets, 2) Opportunity to re-architect nearly $1-$2Tn of global computing infrastructure with accelerators, resulting in a $250-$500bn annual market (vs $250bn prior) over the next 3-5 years, 3) Pipeline update across accelerators (B100, N100), Ethernet switches, DPU, and edge AI; 4) Monetization update across recurring software (AI Enterprise) and services (DGX cloud, autos, gaming); and 5) Expanding enterprise use-cases and demand from sovereign (countries, regions) and on-prem deployments.”
Arya will also be looking for insights on some pertinent questions. Such as will there be adequate grid power to accommodate the substantial energy demands of genAI computing? Could power availability become a “bottleneck for large AI clusters”? How will the increasing competition from specialized chips (such as from Broadcom, Marvell, Alchip) and “merchant silicon” (like AMD, Google) affect the market, especially considering claims of cost-effectiveness, particularly for AI inference tasks, with potential savings ranging from 30% to 50% compared to similar Nvidia hardware? And when will restrictions from China actually begin to impede growth, and is there any looming threat from further regulatory constraints?
Beyond the 4 largest US hyperscalers, Arya also expects the company to bring attention to “TAM expansion opportunities.” There are multi-billion dollar opportunities emerging from Tier-2/3 webscalers like CoreWeave and Lambda Labs, as well as from sovereign nations. “AI is critical in countries developing tools to assist in applications such as cyber security, academic research, climate initiatives, and much more,” the analyst notes.
So, that’s BofA’s view, what does the rest of the Street have in mind for NVDA? Almost all are also bulls. Barring 2 Holds, all 39 other analyst reviews are positive, naturally making the consensus view here a Strong Buy. However, going by the $905.74 average target, the shares will remain rangebound for the time being. Given the constant price target increases, however, it will be interesting see whether more analysts update their models shortly. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
