Nvidia (NVDA) stocks jumped in early trading Monday as the AI chipmaker, the market’s hottest tech company, kicks off its annual Worldwide Developers Conference amid increased spending on new technologies and unprecedented hype from Wall Street investors.
Dubbed “AI Woodstock” by Bank of America analyst Vivek Arya, Nvidia’s flagship GTC event is expected to attract more than 300,000 attendees, in person and online, and include a host of new product launches and industry forecasts. AI market through a keynote speech by Founder and CEO Jensen Huang.
“With the AI revolution now here, it all starts with AI godfather Jensen and Nvidia, as this highly anticipated conference will be a launchpad for a number of products, use cases and partnerships for launching the next phase of the AI revolution,” said Wedbush analyst Dan Ives.
Nvidia shares have added more than $1 trillion in market value over the past year, lifting the stock to record highs and putting it close to Apple. (AAPL) as the second largest technology stock in the world behind Microsoft (MSFT) .
The vast majority of this development is explained by Nvidia’s position in the global AI chip market, where its A100 processors set the benchmark for large language model projects.
Sales at Nvidia’s data center division, which houses its AI chips, rose 410% from a year earlier to $18.4 billion, reflecting increased demand from cloud service providers like Microsoft and broader AI ambitions tied to rival Magnificent 7 meta-platforms. (META) .
Our CEO Jensen Huang’s groundbreaking keynote will take place on Monday, March 18 at 1 p.m. PDT. https://t.co/20m0rYvesh
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$1 trillion spending wave on AI
“Our quick calculations suggest that the overall cost of a two-chip solution supporting 192 GB could exceed $6,000 (compared to $3.3 thousand for the H100),” said Srini Pajjuri, an analyst at Raymond James. “To maintain a similar gross margin, the ASP for the two-chip solution will need to carry a 50-60% premium.”
Wedbush’s Ives sees the new chips, along with Nvidia’s existing lineup, taking the lion’s share of a $1 trillion AI spending wave expected over the next decade.
“The ripple impact that started with Nvidia’s golden chips is now a tidal wave of spending that hits the rest of the tech world for years to come,” Ives said. “We estimate that more than $1 trillion in AI spending will be dedicated over the next decade as business and consumer use cases proliferate globally in this 4th Industrial Revolution.”
Related: Nvidia Stock Issues Warning Ahead of Key AI Conference
HSBC analyst Frank Lee, who raised his price target on Nvidia by $170 to $1,050 per share, also sees the group capturing a larger share of the AI value chain with its new effort GB200 AI.
The new platform combines Nvidia’s Grace Hopper graphics processing unit with a new AI B200 chip, helping it increase average selling prices while adding weight to its current revenue outlook.
Truist Securities analyst William Stein also raised his Nvidia price target ahead of the GTC event, which runs through Thursday, to $1,177 from $911.
Nvidia: large market, limited capacity
Huang’s comments on the Blackwell chip launch and Chip-on-wafer-on-substrate, or CoWoS, will also be crucial for investors in determining Nvidia’s ability to grow data center revenue at the current rate. foreseen.
CoWoS is a crucial part of AI chip manufacturing and has weighed on Nvidia’s shipments for much of last year.
Taiwan Semiconductor (TSM) the world’s largest chip supplier, has struggled to meet growing demand for its high-end so-called stacking and packaging technology, warning investors that “this situation will likely continue until next year” .
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“The key question for investors is how quickly new products will develop given the shorter product cadence,” said Raymond James’ Pajjuri.
“Management has already indicated that it expects next-generation product offerings to be limited,” he added. “Aside from chip supply, the other potential barrier to rapid scale-up is the availability of power supply/physical infrastructure.”
Nvidia shares rose 2.8% in premarket trading, pointing to an opening price of $903.20 each, a move that would extend the stock’s year-to-date gain to about 82.3%. .
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