Nvidia Stock Soars Amid AI Boom and Analyst Upgrades

What's Going On With Nvidia Stock On Friday? - NVIDIA (NASDAQ:NVDA)

Big Tech giants like Microsoft and Amazon continue to invest heavily in AI infrastructure. Nvidia Corp NVDA has seen its market value decline by $900 billion since its peak in June 2024, despite the ongoing surge in artificial intelligence (AI) spending. While this drop might suggest a cooling of the AI boom that propelled Nvidia to its heights, the underlying trends tell a different story. U.S. Big Tech giants led by Microsoft Corp MSFT, Amazon.com Inc AMZN, Alphabet Inc GOOGL, and Meta Platforms Inc META, which represent over 40% of Nvidia's revenue, have all committed to continued investment in AI infrastructure, Bloomberg reports. Nvidia stock is trading up on Friday. Also Read: Nvidia Greenlights Samsung's Fifth-Gen HBM3E Chips for AI Processors: Report Super Micro Computer Inc SMCI, a company that manufactures data center servers used in AI applications, recently projected sales could reach up to $30 billion over the next year, surpassing analyst expectations. Key Nvidia supplier Taiwan Semiconductor Manufacturing Co TSM saw its revenue surge by 45% in July, outpacing the growth rate from the June quarter. Analysts forecast Taiwan Semiconductor's third-quarter revenue to rise by 37%, and the strong July performance indicates that TSMC might exceed these projections, Bloomberg reports. Rhys Williams, chief strategist at Wayve Capital Management LLC, told Bloomberg that companies have yet to reduce their AI spending or report issues with their AI initiatives. Srini Pajjuri, managing director and senior research analyst at Raymond James, told Bloomberg the uncertainty surrounding the monetization of AI and questioned how long companies can sustain this level of spending without straightforward returns. Ken Mahoney, president and CEO of Mahoney Asset Management, told Bloomberg that the recent selloff has brought Nvidia's valuation down to about 30 times forward earnings, potentially making it more attractive to long-term investors. Nvidia stock has increased by over 135% in the last 12 months despite losing 22% in the last 30 days. Investors can gain exposure to Nvidia through the iShares Core S&P 500 ETF IVV and the Vanguard Total Stock Market ETF VTI. Price Action: NVDA shares traded higher by 1.29% at $106.32 premarket at last check Friday. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Nvidia Blog Market News and Data brought to you by Benzinga APIs

Why Is Nvidia Stock Still a Buy After Its Steep Sell-Off? Just Ask Amazon, Google, Microsoft, and Meta. | The Motley Fool

Nvidia's (NVDA -5.12%) luster seems to have faded. The stock is down roughly 25% below its high set only a few weeks ago. Roughly one-third of Wall Street analysts surveyed by LSEG in August no longer recommend buying Nvidia stock, a big change from July. Some investors might think it's time to move on to greener pastures. I suspect the opposite is true. Why is Nvidia still a buy after its steep sell-off? Just ask Amazon (AMZN 0.52%), Google parent Alphabet (GOOG 0.13%) (GOOGL 0.41%), Microsoft (MSFT -0.29%), and Meta Platforms (META -1.05%). All four artificial intelligence (AI) leaders sang the same song in their latest quarterly updates. And their music should be sweet to the ears of Nvidia shareholders. Alphabet reported its second-quarter results on July 23. CFO Ruth Porat noted in the Q2 earnings call that the company's capital expenditures were "driven overwhelmingly by investment in our technical infrastructure with the largest component for servers, followed by data centers." She added that capex in subsequent quarters this year would be at or above the Q1 level of $12 billion. CEO Sundar Pichai was asked about the high levels of AI infrastructure investment. He replied, "[T]he risk of under-investing is dramatically greater than the risk of over-investing for us here, even in scenarios where it turns out that we are over-investing." Microsoft announced its fiscal 2024 Q4 results on July 30. CFO Amy Hood said in the company's earnings call, "To meet the growing demand signal for our AI and cloud projects, we will scale our infrastructure investments with FY '25 capital expenditures expected to be higher than FY '24." Around half of that spending will be on servers to support cloud and AI models. The next day, Meta provided its Q2 update. CFO Susan Li stated in the Q2 call, "[W]e currently expect significant capex growth in 2025 as we invest to support our AI research and our product development efforts." Amazon followed with its Q2 results on Aug. 1. In the company's earnings call, CFO Brian Olsavsky said, "[W]e expect capital investments to be higher in the second half of the year." He added, "The majority of the spend will be to support the growing need for AWS infrastructure as we continue to see strong demand in both generative AI and our non-generative AI workloads." Alphabet, Microsoft, Meta, and Amazon plan to continue spending heavily on AI-related infrastructure. That's great news for Nvidia because it almost certainly means higher sales of its graphics processing units (GPUs). Sure, these big companies are using their own AI chips to some extent. Google has its Trillium custom AI accelerator. Microsoft has Azure Maia. Meta's custom AI chip is MTIA (which stands for Meta Training and Inference Accelerator). Amazon played up its Trainium and Inferentia chips in its Q2 call. However, make no mistake about it: These AI giants rely heavily on Nvidia. That isn't going to change anytime soon. It's possible the dependence on Nvidia could increase soon. Nvidia's Blackwell GPU architecture is leaps and bounds better than anything else on the market. Amazon, Alphabet, Microsoft, and Meta are lined up to be among the first to receive the new Blackwell-based chips when they begin shipping. Nvidia CEO Jensen Huang has great expectations for Blackwell. He predicts that it could be the "most successful product" in the company's history. I suspect he'll be proven right -- with Amazon, Alphabet, Microsoft, and Meta helping make it happen. Some investors could be concerned about the report in The Information of a delay in shipping Blackwell chips due to a design flaw. Nvidia hasn't commented on the rumor other than to confirm that it expects production of the new chips to ramp up in the second half of 2024. I'm not sure if the report is true, although it could be. In Nvidia's quarterly update in May, CFO Colette Kress said the company was working to make Blackwell available for global partners "later this year." However, in Alphabet's Q2 call, Pichai noted that "the latest Nvidia Blackwell platform will be coming to Google Cloud in early 2025." But any Blackwell delay should only be a temporary issue for Nvidia. The overall prospects for the company shouldn't change. And if you listen closely to what Amazon, Alphabet, Microsoft, and Meta are saying, those prospects should remain very good.

Is Nvidia Stock Going to $150? Here's Why 1 Wall Street Analyst Thinks So. | The Motley Fool

Global markets plunged this week, but savvy investors could boost long-term returns because of it. Markets started the week with investors all around the globe running for cover. In any sell-off, some of the hardest-hit stocks are growth stocks that had run up the most. That includes advanced chip maker Nvidia (NVDA -5.12%). Even with the market bouncing back some this week, the high-flying stock is now down about 25% from its record closing price in mid-June. But one Wall Street analyst thinks the plunge in Nvidia shares creates a great opportunity for investors. Oppenheimer analyst Rick Schafer just released his latest research note saying investors could gain about 50% from Nvidia stock if he's right about the stock reaching $150 per share. The selling of Nvidia stock was exacerbated after rumors circulated over the weekend that a defect discovered in its next-generation Blackwell chip will cause a delay in its rollout later this year. That chip and its architecture are expected to be very popular among customers looking to get the highest computing power available for artificial intelligence (AI) plans. But Oppenheimer's Schafer thinks there's no need for investor concern even if those rumors are true. That's because any delay rolling out Blackwell will be used to help supply the excessive demand for Nvidia's existing H100 AI chips. In his research note, Schafer wrote, "Nvidia's competitive position remains sound, and we don't expect any share loss from a minor delay. ... We see Nvidia as best positioned in AI, benefiting from full stack AI hardware/software solutions." Schafer's comments make complete sense. All signs point to a big gap between Nvidia's current chip capacity and surging demand. While competitors will help fill some of that gap, Nvidia should be happy to continue to sell its existing chips. Blackwell will just boost those sales even further. That makes the correction in Nvidia stock an opportunity to buy.

Nvidia in spotlight as Mizuho ups price target ahead of earnings (NVDA)

Nvidia (NASDAQ:NVDA) was in the spotlight on Friday as Mizuho Securities upped its price target on the semiconductor company ahead of its fiscal second-quarter results, slated to be released later this month. Shares were up 1.4% in premarket trading. There is still tight capacity for Taiwan Semiconductor's (TSM) Chip-on-Wafer-on-Substrate with the continued ramp of Nvidia's H100 and H200 GPUs, analyst Vijay Rakesh said, as Nvidia continues to see strong orders for the line of accelerators. Rakesh upped his price target on Nvidia to $132 from $127.50. However, Nvidia is now starting to pivot to the Blackwell line using NVL36/72, which uses a new architecture of Chip-on-Wafer-on-Substrate, known as CoWoS-L. This should continue to ramp into 20205, Rakesh added. And even with the news that mass production of the Blackwell line could be delayed until early next year, demand for it hasn't changed, Rakesh added. Lastly, Nvidia could pivot back to the B200A and 210A in the second-half of 2025 and part of 2026 due to better Chip-on-Wafer-on-Substrate supply for low-to-mid budget AI servers, Rakesh said. Nvidia is slated to report results after the close of trading on August 28. A consensus of analysts expect the company will earn $0.64 per share on $28.54B in revenue. More on Nvidia Nvidia: Stock Price Likely Peaked Even If Fed Cuts Rates Nvidia: Bad News For Company Is Good News For Investors (Rating Upgrade) Nvidia: Recent Pullback Presents A Prime Buying Opportunity Nvidia-backed Recursion to acquire Exscientia in all-stock deal Super Micro CEO indicates Nvidia's Blackwell likely delayed until early 2025

Missed Out on Nvidia? Buy AMD Stock Instead. | The Motley Fool

This smaller Nvidia peer seems to be gaining some ground in the market for AI chips deployed in data centers. Nvidia (NVDA -5.12%) and Advanced Micro Devices (AMD -1.16%) have enjoyed contrasting fortunes on the stock market in 2024 so far. While one of these semiconductor stocks delivered stellar gains, the other has not received much love on Wall Street. Nvidia stock is up more than 116% in 2024, while AMD has underperformed the PHLX Semiconductor Sector index by a wide margin. This is evident from the chart below. Nvidia's stellar gains can be justified by the impressive growth that it has been clocking in recent quarters thanks to the healthy demand for its artificial intelligence (AI) chips. In the first quarter of fiscal 2025 (which ended on April 28), the company's revenue increased a stellar 262% year over year to $26 billion. The company also witnessed a whopping 461% year-over-year jump in its non-GAAP (adjusted) earnings per share. However, the solid rally in Nvidia stock has made it quite expensive. It is now trading at 63 times trailing earnings and 33 times sales. AMD's weak performance on the market means that investors can buy it at less than 10 times sales right now. Also, AMD's forward earnings multiple of 40 is almost in line with Nvidia's forward price-to-earnings ratio. Let's look at the reasons why buying AMD could be a smart move for investors who have missed out on Nvidia's terrific rally. AMD released its second-quarter 2024 results on July 30. The chipmaker's overall revenue increased 9% year over year to $5.84 billion, while adjusted earnings jumped eightfold from the year-ago period to $0.16 per share. The numbers were ahead of consensus expectations, and more importantly, AMD's guidance also exceeded Wall Street's estimates. The company has guided for $6.7 billion in revenue in the current quarter at the midpoint of its guidance range. That would be a year-over-year improvement of 16%, indicating that AMD's growth is set to accelerate in the current quarter. Analysts were expecting AMD to guide for $6.62 billion in revenue in the second quarter. The biggest reason why AMD is forecasting its Q3 revenue growth to accelerate is because of the solid momentum that its data center business has gained. The company reported record data center revenue of $2.8 billion in the previous quarter, an increase of 115% from the year-ago period. This robust growth was driven by the growing demand for AMD's Instinct data center graphics cards that are being deployed for AI training and inferencing. The chipmaker pointed out that it sold $1 billion worth of its MI300X AI accelerators last quarter. What's more, it has raised its full-year AI graphics processing unit (GPU) forecast to $4.5 billion as compared to the earlier estimate of $4 billion. However, it won't be surprising to see AMD finishing the year with stronger data center GPU revenue as the company says it is "working very closely with our system and cloud partners to ramp availability of MI300 solutions to address growing customer demand." There is a good chance that AMD could be able to ramp up the output of its AI GPUs as its foundry partner Taiwan Semiconductor Manufacturing plans to increase its advanced packaging capacity by an annual rate of 60% through 2026 so that more AI chips can be manufactured. Additionally, investors can expect AMD to continue clocking healthy growth in both data center GPUs and central processing units (CPUs) in the long run as the overall market for AI accelerators is estimated to grow at an annual rate of 27% through 2029, generating almost $373 billion in revenue at the end of the forecast period. With AMD gaining traction in AI chips and set to grow at a faster pace in the current quarter, it is easy to see why investors are upbeat about its prospects and why the stock jumped more than 6% following its earnings report. Analysts expect AMD's top line to jump almost 13% this year to $25.6 billion. However, as the following chart indicates, it is expected to clock faster growth in 2025 and report healthy double-digit growth in 2026. Even better, analysts are forecasting AMD's earnings to grow at a solid pace following this year's estimated jump of 27% to $3.38 per share. AMD could sustain this impressive growth over the long run, with its earnings expected to increase at a compound annual growth rate of 33% for the next five years. As such, investors looking for a cheaper alternative to Nvidia to capitalize on the AI revolution would do well to buy AMD as it could soar impressively in the long run thanks to the growing demand for its AI chips.