Nvidia’s (NVDA) stock surged 13% on Wednesday. The upside was driven by positive signals from its top customer, Microsoft (MSFT), and key rival, Advanced Micro Devices (AMD), both indicating continued demand for artificial intelligence (AI) servers.
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Microsoft to Boost AI Spending
During its fiscal Q4 earnings call, Microsoft revealed plans to increase its capital expenditure on AI infrastructure.
This announcement boosted investor optimism, particularly for Nvidia, as Microsoft’s substantial investment is expected to drive higher demand for NVDA’s high-performance GPUs. Additionally, MSFT’s comments have alleviated concerns about the long-term potential of the AI market.
AMD’s Upbeat Forecast
Nvidia’s rival, AMD, also contributed to the positive sentiment of investors by reporting better-than-expected earnings. Further, AMD raised its AI chip sales forecast for the year to $4.5 billion.
This further solidified the expectations of robust demand for GPUs in the data center market.
Analysts Remain Bullish
Following the earnings announcements from MSFT and AMD, two analysts reiterated a Buy rating on NVDA stock. Among the bullish analysts, Joe Moore from Morgan Stanley (MS) named Nvidia a “top pick.” He highlighted strong AI spending momentum and robust demand for the company’s H100 Blackwell chip.
Interestingly, Moore is a Top-rated analyst with a success rate of 52% on Nvidia. Investors should note that TipRanks ranks the Top analysts according to industry, timeline, and benchmarks. The ranking reflects an analyst’s ability to deliver higher returns through recommendations.
What Is the Price Target for NVDA?
On TipRanks, NVDA has a Strong Buy consensus rating based on 37 Buy and four Hold ratings. After a rally of 40.9% in the past three months, the analysts’ average price target on Nvidia stock of $142.74 implies a 21.98% upside potential from current levels.
