Nvidia, GSK Partner To Use AI For Drug Discovery

Nvidia announced a partnership with UK’s GlaxoSmithKline which will be focused on using artificial intelligence (AI) to develop new vaccines and drugs. Shares of the graphics chip maker rose 4.4% while the global healthcare company’s stock gained 1.2% on Monday.

Under the agreement, Nvidia (NVDA) “will contribute its deep expertise in GPU optimization and high-performance computational pipeline development, including Nvidia Clara Discovery, a new collection of optimized computational drug discovery applications and frameworks.”

Additionally, Nvidia said that it is building Cambridge-1, United Kingdom’s most powerful supercomputer, to which GlaxoSmithKline will have access. The company expects the Cambridge-1 supercomputer to come online by year-end. (See NVDA stock analysis on TipRanks)

“GSK and Nvidia together will help push the boundaries of what AI can do and put vast data sources to work to advance the discovery of new medicines and vaccines,” said Nvidia’s Kimberly Powell. “GSK is leading the industry in defining the next generation of data-driven drug discovery by harnessing genetic and clinical data to bring more precision to research and medicine.”

On Oct. 5, Oppenheimer analyst Rick Schafer raised the stock’s price target to $600 (10% upside potential) from $550 and reiterated a Buy rating. In a note to investors, Schafer said, “We see several sustained structural tailwinds driving sustained outsized top-line growth: gaming, datacenter/AI accelerators, and autonomous vehicles. We believe these factors justify its premium valuation.”

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 25 Buys, 4 Holds and 1 Sell. With shares up nearly 132% year-to-date, the average price target of $564.28 implies additional upside potential of about 3.4% to current levels.