Nvidia (NASDAQ: NVDA) has been in scintillating form on the stock market in 2024, reaching gains of nearly 180% as of this writing. This is due to the robust growth that the company has been clocking in recent quarters on account of the strong demand for its graphics cards deployed in artificial intelligence (AI) servers.
The stock’s median 12-month price target of $150 — as per 64 analysts who cover Nvidia — indicates that there isn’t much upside on offer as it points toward gains of just 9% from current levels. However, Bank of America recently raised their price target on Nvidia from $165 to $190, which would translate into a 38% gain from current levels.
Let’s see why that was the case and check if this high-flying semiconductor stock could rise above consensus estimates and deliver stronger gains going forward.
Bank of America analysts have raised their price target on Nvidia because of the company’s dominant position in the AI chip market. They believe that the chipmaker could continue commanding an estimated 80% to 85% share of this space, which puts the company in a terrific position to capitalize on a $400 billion market opportunity.
Bank of America’s bullishness also stems from the arrival of Nvidia’s new generation of Blackwell processors, as well as a terrific earnings report from key supplier TSMC and Nvidia CEO Jensen Huang’s claim that the demand for its upcoming Blackwell cards is “insane.” It is worth noting that Nvidia management pointed out on the company’s August earnings-conference call that it is on track to sell several billion dollars’ worth of Blackwell processors in the fourth quarter of the current fiscal year.
More importantly, the demand for Blackwell chips is expected to be higher than their supply in 2025. That won’t be surprising as multiple cloud-computing giants are in line to deploy Nvidia’s Blackwell processors. In March this year, Nvidia management pointed out that Amazon Web Services, Dell Technologies, Google, Meta, Microsoft, OpenAI, Oracle, Tesla, and xAI are among the many companies expected to adopt the Blackwell platform.
That’s not surprising considering the huge leap in performance that Nvidia’s Blackwell platform is expected to deliver as compared to the prior-generation Hopper chips. More specifically, Nvidia is promising a 4 times increase in AI training performance and a 30 times jump in AI inference as compared to Hopper. Even better, Nvidia claims that Blackwell can train large language models (LLMs) at “up to 25x less cost and energy consumption than its predecessor.”
