Nvidia has been one of the most interesting and closely followed stocks in recent memory as the fortunes of the broader market increasingly hinge on the AI chip leader.
At one point this year, the stock accounted for more than a third of the S&P 500’s gains, and some investors even held on to it. Watch Nvidia’s earnings announcement parties.
Nvidia’s astronomical rise to a $3 trillion company has also been somewhat contentious with many on Wall Street questioning the stock’s ability to sustain further gains while others see the AI boom fueling further upside.
This has investors wondering: “Should I buy Nvidia stock now or sell?”
Analysts at Bank of America have an answer: In a note Thursday, they reiterated a buy rating on Nvidia stock and raised their price target to $190 from $165, meaning it could rise 38% from Friday’s closing price.
At $190 a share, Nvidia’s market cap would also explode to $4.7 trillion from $3.4 trillion today.
In fact, Bank of America is so bullish on Nvidia stock that analysts have called it a “generational opportunity,” estimating a total addressable market of more than $400 billion for AI accelerators.
“AI (demand) models continue to evolve, with the pace of new LLM model launches now increasing to 3-5 times per year per developer (OpenAI, Google, Meta, etc.), and each new major generation requiring 10-20x more compute,” analysts said. : “The need for training.”
Their confidence in Nvidia has been boosted by other companies in the chip sector such as Taiwan Semiconductor Corporation and ASML, which have recently indicated strong demand for artificial intelligence. Bank of America’s meetings with Broadcom and Micron executives as well as AMD’s comments yielded similar indications.
Meanwhile, Nvidia CEO Jensen Huang also noted the high demand for the company’s next-generation AI chip.
“Blackwell is in full production, Blackwell is as planned, and the demand for Blackwell is crazy.” He told CNBC Earlier this month. “Everyone wants to have the most, and everyone wants to be first.”
Adding to BofA’s bullish case for Nvidia are its underappreciated enterprise partnerships with the likes of Accenture, ServiceNow, Microsoft and others, as well as its software products that help cement Nvidia’s dominance in hardware. They come together to create a deeper overall Nvidia AI ecosystem.
Additionally, Nvidia could generate more than $200 billion in free cash flow over the next two years, rivaling even Apple, according to Bank of America estimates.
Earnings reports due later this month from tech giants developing AI technologies, such as Microsoft, Google and Amazon, should provide more insight into demand. Nvidia is scheduled to submit its report on November 20.
While some on Wall Street have expressed skepticism about whether massive investments in AI are translating to the bottom line, the tech sector is in a fierce race to be first on the block with the latest advances in AI.
“We continue to see an increase in the pace of development of the new model,” Bank of America said. “LLM courses in particular are developed to accommodate larger size and better thinking abilities, both of which require greater training intensity.”
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