What Happened?
Shares of leading designer of graphics chips Nvidia (NASDAQ: NVDA) jumped 3% in the morning session after investment firm Cantor Fitzgerald raised its price target on the stock, reflecting strong confidence in the company's artificial intelligence growth prospects.
The firm increased its price target to $300 from $240 while keeping an Overweight rating. This decision followed meetings where Nvidia's CEO, Jensen Huang, and other executives detailed their vision for the ongoing build-out of AI infrastructure. Adding to the positive sentiment, Huang stated that demand for computing had gone up substantially. Furthermore, key Nvidia supplier TSMC reported a second straight month of over 30% growth, fueled by demand for advanced AI chips.
After the initial pop the shares cooled down to $194.05, up 2.6% from previous close.
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What Is The Market Telling Us
Nvidia’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 2.3% on the news that several Wall Street firms raised their price targets on the stock and reports surfaced of a major deal involving its advanced AI systems.
The positive sentiment was fueled by a reported deal where cloud provider CoreWeave agreed to supply Meta Platforms with up to $14.2 billion in AI computing power using Nvidia's latest GB300 systems. This agreement highlighted the immense and sustained demand for AI infrastructure from major tech companies. Further boosting investor confidence, several financial firms, including KeyBanc, Barclays, and Citi, increased their price targets for Nvidia. Analysts pointed to an improving supply of key components and strong, continued spending in the AI sector as the primary reasons for their optimistic outlook, which helped push the stock to a record high.
Nvidia is up 40.3% since the beginning of the year, and at $194.05 per share, has set a new 52-week high. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $14,100.
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