Nvidia: On Course for New Heights Despite Headwinds

Nvidia shares still have significant upside potential, according to Andrew Chang, Technology Director at S&P Global Ratings. Chang is convinced that the shares of the leading chip manufacturer will remain on an upward trajectory for at least another year. Recently, Nvidia CEO Jensen Huang boosted the company's stock prices with positive forecasts for the next GPU generation called Blackwell at a Goldman Sachs conference in San Francisco. According to Chang, Huang's comments supported the predictions of a continued upward trend for Nvidia. Partner companies like Oracle, which raised its revenue forecasts after surpassing quarterly results and doubled planned investments for the fiscal year, also show strong demand for Nvidia chips. Chang sees this as extremely positive signs for Nvidia's future. However, not all market observers are as optimistic. Some analysts express concerns about the sustainability of Nvidia's growth. Despite an impressive increase of 2,514% in the last five years, high growth could be impacted by in-house developments from major customers like Apple and Microsoft, who might develop their own AI chips. Chang also sees another risk in the volatility of demand for data center chips. Should customers like Oracle, Microsoft, or Amazon reduce their orders, this could lead to a decline in demand. Additionally, there is the prospect of increased regulation of the AI market. Nvidia is currently under scrutiny by the U.S. Department of Justice due to a new antitrust investigation, and Chang expects other countries to follow suit. Despite these challenges, the sentiment on Wall Street remains generally positive for Nvidia. According to Nasdaq data, analysts rate the stock with an average price target of $153, which corresponds to an upside potential of 29%.