Nvidia has been a highly anticipated and closely monitored stock recently, with the broader market’s fortunes increasingly tied to the AI chip leader. At one point this year, the stock contributed to over a third of the S&P 500’s gains, with some investors even hosting watch parties for Nvidia’s earnings releases.
Nvidia’s remarkable rise to a $3 trillion company has been somewhat polarizing, as many on Wall Street have questioned whether the stock can continue to see further growth, while others believe that the AI boom will drive more upside.
This has led investors to wonder, “should I buy Nvidia stock right now, or sell it?”
Bank of America analysts have an answer: they have reiterated their buy rating on Nvidia stock and raised their price target to $190 from $165, suggesting a potential 38% increase from the closing price on Friday.
At $190 a share, Nvidia’s market cap would also rise to $4.7 trillion from the current $3.4 trillion.
In fact, BofA is extremely bullish on Nvidia stock, referring to it as a “generational opportunity,” with an estimated total addressable market of over $400 billion for AI accelerators.
“AI models (demand) continue to evolve, with the cadence of new LLM model launches now increased to 3-5 times per year per developer (OpenAI, Google, Meta, etc.), and each new major generation requiring 10-20x compute requirement to train,” analysts stated.
Their confidence in Nvidia has been bolstered by other companies in the chip sector such as Taiwan Semiconductor and ASML, which have recently indicated strong AI demand. Meetings with executives at Broadcom and Micron, as well as comments from AMD, have also provided similar indications.
Additionally, Nvidia CEO Jensen Huang highlighted significant demand for the company’s next-generation AI chip.
“Blackwell is in full production, Blackwell is as planned, and the demand for Blackwell is insane,” he mentioned in an interview with CNBC. “Everybody wants to have the most, and everybody wants to be first.”
Further supporting BofA’s bullish stance on Nvidia are its enterprise partnerships with companies like Accenture, ServiceNow, Microsoft, and others, as well as its software products that reinforce Nvidia’s leadership in hardware. These factors contribute to a more comprehensive Nvidia ecosystem for AI.
Moreover, BofA estimated that Nvidia could generate over $200 billion in free cash flow over the next two years, rivaling even Apple.
Earnings reports later this month from tech giants developing AI technologies, such as Microsoft, Google, and Amazon, are expected to provide further insights into demand. Nvidia is set to report on November 20.
While some on Wall Street have doubts about whether large investments in AI are translating into profits, the tech sector is engaged in a fierce competition to be the first to introduce the latest advancements in AI.
“We continue to see the pace of new model development increase,” BofA noted. “LLMs in particular are being developed for both larger size and better reasoning capabilities, which require greater training intensity.”