TLDR:
- Nvidia stock is up 179% in 2024, reaching new highs in October
- Analysts are raising price targets for Nvidia based on strong AI chip demand
- Taiwan Semiconductor reported robust earnings, boosting outlook for Nvidia
- Nvidia’s market cap has reached $3.4 trillion, behind only Apple
- Key customers like Google, Amazon, Microsoft and Meta are investing heavily in AI
Nvidia, the leading maker of AI chips, continues its remarkable ascent in 2024 as demand for artificial intelligence technology shows no signs of slowing. The company’s stock price has surged 179% year-to-date, recently hitting new all-time highs in October.
Analysts are taking notice of Nvidia’s stellar performance and raising their price targets accordingly. Chris Versace, a veteran analyst, recently boosted his 12-month target for Nvidia from $155 to $175, implying potential upside of nearly 28% from current levels. Bank of America was even more bullish, raising its target to $195.
The optimism stems from robust earnings reported by Taiwan Semiconductor, the world’s largest contract chipmaker and a key Nvidia supplier. Taiwan Semi posted revenue growth of 36% year-over-year in its latest quarter, with impressive profit margins above 40%. This strong performance suggests continued momentum for Nvidia’s AI chip business.
Nvidia’s market capitalization has now reached $3.4 trillion, trailing only Apple among publicly traded U.S. companies. The meteoric rise has been fueled by surging demand for Nvidia’s graphics processing units (GPUs), which power many of today’s AI applications.
Key customers like Google, Amazon, Microsoft and Meta Platforms continue to invest heavily in AI infrastructure, providing a strong tailwind for Nvidia. These tech giants are expected to maintain or potentially increase their capital expenditures on AI-related hardware in the coming quarters.
Nvidia CEO Jensen Huang has become something of a celebrity in tech and investing circles, with his trademark leather jacket becoming instantly recognizable. Under Huang’s leadership, Nvidia has positioned itself at the forefront of the AI revolution.
The company’s newest AI chip, codenamed Blackwell, is generating significant buzz in the industry. Analysts estimate it could contribute billions in revenue when it launches, underscoring the massive appetite for cutting-edge AI hardware.
While some worry about potential oversupply in the semiconductor market, demand for Nvidia’s chips currently outstrips supply by a factor of 15 to 1 according to some estimates. This supply-demand imbalance has allowed Nvidia to maintain strong pricing power.
Taiwan Semiconductor’s success has also benefited from the AI boom, with its stock up 93% in 2024. The company recently joined the exclusive club of firms with market capitalizations exceeding $1 trillion.
As Nvidia prepares to report its next quarterly earnings, all eyes will be on any updates regarding AI chip demand and supply constraints. For now, the company’s stellar run shows few signs of slowing as the AI gold rush continues.
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