Nvidia’s CEO, Jensen Huang, has expressed anticipation about contributing to the modernization of data centers valued at a trillion dollars.
Nvidia’s stock has experienced significant fluctuations over the past several months. After reaching a record high in June, the stock price of the semiconductor chip supplier fell by more than 30%. Subsequently, the stock saw a resurgence, followed by another sharp decline, before achieving a new high. This volatility is attributed to robust sales and earnings growth, coupled with high investor expectations, balanced against an elevated valuation.
A Wall Street analyst supports a positive outlook on Nvidia, suggesting the stock could rise by another 25% from its current value. Ben Reitzes from Melius Research advises investors to purchase the stock, valuing it at $165 per share.
A key factor in Reitzes’ optimistic perspective is the belief that Nvidia has established a lasting competitive advantage. In a research note cited by Barron’s, he stated that Nvidia’s most significant accomplishment is the development of infrastructure that operates across both large and small cloud platforms, enabling rapid monetization.
This competitive edge is partly due to Nvidia’s CUDA software program kit. As Nvidia releases its new, more powerful chips, like the Blackwell GPU, the proprietary parallel computing platform permits customers to utilize their existing Hopper series chips to enhance AI development. This feature makes Nvidia appealing to customers, allowing them to scale up their AI training capabilities while still realizing returns on previous GPU investments. There remains substantial spending potential for AI growth.
During a recent podcast interview, CEO Jensen Huang remarked on the need to reinvent the entire computing technology stack to modernize an estimated trillion dollars’ worth of data centers. With this substantial capital investment in mind, Reitzes sees significant potential for Nvidia’s stock, encouraging investor interest.
