- According to Credit Suisse, Nvidia’s stock is expected to hit $275 due to its leadership in AI.
- Analysts point to GPUs and software in their survey of the top artificial intelligence stocks.
- Nvidia’s stock has risen more than 60% since the beginning of the year as ChatGPT raised expectations for AI.
According to a Credit Suisse report, Nvidia is the top investor among US semiconductor companies when it comes to artificial intelligence.
Bank analysts have set a price target for the semiconductor maker at $275, up 18.5% from March 2, the date of the report’s publication. The stock has surged more than 60% so far this year, and excitement is on the rise. Chat GPT Created the hype around artificial intelligence stocks.
After initially making graphics chips used in video games, Nvidia is now making chips for AI applications ranging from self-driving cars to robots.
Credit Suisse characterized Nvidia as a “leading silicon AI enabler” and said its graphics processing unit is at the core of AI development and machine learning.
In fact, Nvidia’s GPUs control 95% to 100% of the computer training market, and no challenger to this lead has yet emerged, says the report.
Moreover, while rival chips like Intel control much of the workload for AI inference (i.e., the answers that chatbots generate from user prompts), Nvidia’s superior performance puts Nvidia’s chips at the Analysts say it is gaining more and more market share.
“We expect GPUs, especially NVDA GPUs, to continue gaining share of the AI inference market over time,” they added.
Additionally, Nvidia’s software will be a “competitive moat” for AI that will keep other companies at bay, said Credit Suisse.
Much of today’s AI is developed with programs made by NVIDIA (such as the CUDA library) and works only on NVIDIA’s GPUs.
On top of that, Nvidia’s enterprise AI software, which essentially serves as an operating system for AI, is extremely difficult for competitors to replicate, even if it’s comparable to the company’s hardware.
“While hardware secured NVDA’s leadership in AI silicon, we believe software will enable NVDA to maintain its position,” the report said.
Nvidia estimates that the total market addressable by AI is $300 billion in hardware and $300 billion in software, making it $600 billion.
Credit Suisse isn’t the only one to be bullish. Nvidia will be the dominant computing engine driving the AI and cloud sectors over the next decade, Alger vice president Ankur Crawford said last month.
“How come you can’t own this at some point?” she told CNBC As Nvidia stock surges after chipmaker Reports strong fourth quarter earnings We talked about the possibilities of AI.
