NVIDIA (NVDA, Financial) recently surpassed its previous intraday high, closing with a significant gain and reaching a record closing price of $143.71. This surge brings its market capitalization close to Apple's $3.6 trillion valuation. Despite concerns over AI spending and a brief setback following ASML's earnings report, NVIDIA's stock rose by 2% last week, marking a 50% increase since early August.
As NVIDIA approaches its November earnings announcement, Wall Street analysts remain optimistic. A Bloomberg survey suggests a target price of $148.37 within the next 12 months, supported by the company's strong performance in enterprise AI, highlighted by partnerships with firms like Microsoft and Accenture. Analysts, including those from Bank of America, attribute the upbeat outlook to robust AI market demand where NVIDIA is seen as the preferred partner for AI hardware and software.
Wedbush analyst Dan Ives shared similar sentiments, predicting a tenfold increase in AI infrastructure markets by 2027, with $1 trillion in capital expenditure expected. Ives projects a 20% rise in tech stocks by 2025, supported by an AI-driven market rally and favorable macroeconomic conditions. NVIDIA's CEO recently noted the intense demand for its AI chips, critical for powering generative AI software in data centers.
Positive news from NVIDIA's industry partners, such as Micron and TSMC, has also buoyed the stock. Both companies exceeded Wall Street's expectations in their recent earnings reports, reflecting NVIDIA's integral role in the AI sector. According to International Business Strategies, the AI chip market is forecasted to grow by 99% in 2024 and 74% in 2025.
