Analyst on Wall Street Believes Nvidia Shares Could Reach $175. Is it Worth Investing at $140? (Paraphrased)
In 2024, Nvidia (NVDA 0.10%) dominated investor conversations, soaring 171% in value, primarily due to exploding revenue and earnings. Big tech companies scrambled for Nvidia's AI-focused chips for their data centers. At the CES conference, CEO Jensen Huang gave an update on Nvidia's latest semiconductor chips and products, prompting one analyst to advise buying Nvidia stock with a $175 price target. Oppenheimer analyst Rick Schafer saw a potential 25% increase from current levels.
Huang's CES presentation was less data-centric than some analysts anticipated. Instead, he discussed growth opportunities beyond those sectors. In the nine months ending October 2024, Nvidia's data center segment accounted for over 87% of revenue, a trend driven by hyperscalers racing to build AI-optimized data centers.
Schafer identified several potential growth areas for Nvidia:
- Automotive: Nvidia is delving into the automotive world, focusing on autonomous vehicles and advanced driver-assistance systems (ADAS).
- Robotics: Nvidia's solutions are being utilized in robotics, with a particular focus on the need for three computing systems in robotics and auto.
- Omniverse: Nvidia is investing in the Omniverse platform, a cloud-based service for creating synthetic data and building AI agents for applications such as autonomous vehicles and robotics.
- Gaming GPUs: Nvidia has announced a new generation of gaming GPUs.
- Industry-Specific Solutions: Nvidia is concentrating on offering industry-specific solutions, such as NVIDIA NIM for manufacturing and large language models (LLMs) like Nemotron and NeMo for numerous applications.
- Project DIGITS: Nvidia is developing a new desktop supercomputer called Project DIGITS, aimed at academics and researchers requiring powerful computing capabilities without the necessity for vast data centers.
Clearly, Nvidia's solutions extend beyond its GPU hardware. Huang introduced Project DIGITS, a powerful computing tool for academics and researchers, launching in May 2024. With these opportunities, Nvidia remains a compelling investment at current prices.
Investors who are interested in the finance sector might see potential in Nvidia's diversification, as the company is not solely reliant on its data center segment anymore. Nvidia's CEO, Jensen Huang, revealed that they are investing heavily in the Omniverse platform, which could provide significant returns to those who decide to invest in the company's stock.
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