TL;DR:
- Nvidia and AMD shares surge due to increased demand for AI-powered chips.
- Nvidia maintains its dominance, while AMD is poised to gain market share.
- Barclays and KeyBanc analysts raise price targets for both companies.
- Nvidia’s stock hits a new record high, making it the world’s most valuable chipmaker.
- Analysts project a positive outlook for both Nvidia and AMD.
- Nvidia plans to produce AI chips for Chinese customers to comply with export rules.
- AMD introduces new AI data center chips to challenge Nvidia.
Main AI News:
Nvidia and Advanced Micro Devices (AMD) shares are riding a wave of optimism in the wake of significant price target hikes by Wall Street analysts, all thanks to the surging demand for AI-powered chips. Nvidia, a reigning titan in the realm of advanced AI chips, is witnessing its stock ascend to new heights. Meanwhile, AMD, gearing up to strengthen its position, is expected to seize a larger market share as it ramps up chip deliveries to enterprise clientele.
Barclays analysts, spearheaded by Tom O’Malley, assert that AMD is poised for a robust performance this year. They point out that supply constraints have led customers to embrace the entire NVDA platform to secure priority shipments of accelerators. As they noted in an investor note, 2024 marks the turning point when AI truly starts to flourish, with AMD and other chipmakers poised to snatch a bigger slice of the market pie.
Nvidia’s stock soared by an impressive 3%, hitting a record-breaking $563.65, while AMD experienced a staggering 7.5% surge, with its shares reaching $157.57—the highest level they’ve achieved in over two years. Nvidia’s meteoric rise last year has crowned it the world’s most valuable chipmaker, with AMD not far behind, more than doubling its share value.
Barclays upped the ante, revising their price target for AMD shares from $120 to $200, demonstrating their unwavering faith in the company’s prospects. KeyBanc analysts joined the chorus, boosting their price target for AMD to $195, up from $170. Nvidia, too, did not go unnoticed, as KeyBanc pushed its price target to $740, up from $650. These actions catapulted both stocks into the upper echelons of the industry-wide PHLX semiconductor index, which recorded a 1.15% gain for the session.
Delving into the wisdom of the analyst crowd, we find that the median price target for Nvidia’s stock, as determined by 53 experts, now stands at $625, slightly down from $627.50 a month ago. Their collective consensus? It’s a resounding “buy.” On the flip side, AMD’s shares have caught the attention of 47 analysts, with a median price target of $145, up from $130 a month earlier. Unanimously, they too urge investors to buy the stock, as per LSEG Data.
Nvidia is strategically planning to initiate mass production later this year of an AI chip tailored specifically for its Chinese clientele. This move aims to align with the heightened U.S. export regulations, as reported by Reuters earlier this month. In a counter move, AMD announced the introduction of two new AI data center chips in December, positioning itself for a head-to-head showdown with Nvidia’s flagship microprocessors. The battleground is set, and the stakes in the AI chip industry have never been higher.
Conclusion:
The surge in Nvidia and AMD shares, driven by analyst optimism surrounding AI-powered chips, underscores the growing importance of AI technology in the semiconductor market. Nvidia’s continued dominance and AMD’s impending market share expansion indicate a promising future for both companies. This trend reflects the increasing demand for AI capabilities across various industries, positioning Nvidia and AMD as key players in this evolving market.
