Nvidia Defies Market Fluctuations with Strong Analyst Support

The Nvidia stock is currently experiencing remarkable support from Wall Street analysts despite growing competition and concerns about future demand for AI chips. On Thursday morning, the stock price climbed by up to 2.7% after analysts from Bernstein, TD Cowen, Morgan Stanley, and Truist reaffirmed their positive evaluations. William Stein from Truist Securities highlighted the potential and superiority of Nvidia's entire technology solution and raised his price target from $169 to $204. The positive assessment from Wall Street experts initially led to an impressive 4.8% increase in Nvidia's stock on Wednesday. However, the joy was short-lived, as the general market conditions following the recent forecasts from the Federal Reserve caused the price to drop by about 1%. Encouraged by the recent price gains, Nvidia's stock remains approximately 11% below its record high of $148.88 in early November. Nevertheless, there is ongoing concern that Nvidia's GPUs could lose market share in the AI chip business as customers increasingly develop their own custom chips. Companies like Google and Meta, along with Broadcom, have introduced their own solutions, while Microsoft, Tesla, and Amazon are also opting for individual chips. Recent announcements from Broadcom regarding new customer projects, potentially involving OpenAI and Apple, boosted its stock, whereas Nvidia suffered losses. These custom chips, known as ASICs, could challenge Nvidia's GPUs through lower costs and specialized applications. A Morgan Stanley report suggests that these chips could increase their market share of the AI chip market from 11% in 2024 to 15% by 2030. Nevertheless, Morgan Stanley still views Nvidia as a market leader, as the company consistently raises the bar for competition. In a Bank of America podcast, analyst Vivek Arya reiterated Nvidia's dominant role in the AI chip sector. However, potential cuts in investments in AI technologies, as indicated by recent reports from Microsoft and Google, remain concerning. Should the pace of AI developments slow down, it could impact future market dynamics and investments.