Nvidia stock hits best winning streak since 2007 as AI advantage called ‘insurmountable’

Shares of Nvidia closed up 1% on Wednesday for its eighth straight positive session, with a 15.3% gain in that time, making it the longest winning streak for Nvidia stock since July 2020, and the best eight-day winning streak of all time. the stock since the eight days ended June 22, 2007, during which it gained 17.4%, according to Dow Jones Market Data.

Wall Street analysts reported Wednesday that Nvidia’s graphics processing units are being widely adopted by cloud service providers as the company’s software offerings create a wider moat. Bernstein analyst Stacy Rasgon, with an outperform rating on the stock, said Nvidia is uniquely placed to benefit from the death or slowdown of Moore’s Law “as they provide both the hardware and software environments needed to power the data center. cost and power savings that are increasingly becoming unattainable with CPUs alone.”

Read: Nvidia is launching new AI platforms, with Google Cloud as an early adopter

Rasgon added that Nvidia’s advantage of its software ecosystem “appears to be becoming almost insurmountable.”

“To be honest, we’re struggling to see how anyone else could compete with Nvidia’s ecosystem, even if they managed to get closer on the hardware side,” Rasgon said.

On Tuesday, Nvidia Founder and Chief Executive Jensen Huang announced a slew of products and services aimed at expanding AI development, including new chips and platforms specifically targeting generative AI applications and AI video creation. and images. At a news conference on Wednesday, Huang said he expects the small amount of revenue the company is currently making from generative AI to grow “quite large” over the next 12 months.

For more: How Nvidia plans to fuel the AI ​​boom and a new era of chipmaking

Citi Research analyst Atif Malik, who has a buy rating and raised his price target to $310, echoed something Huang said this week, calling the Google partnership “a big deal.” He noted that Google chose Nvidia’s L4 inference chips over its own TPU5 custom silicon, “which opens up greater computing power.” [total addressable market] for Nvidia.”

Malik also noted that “enterprises are reaching out as some are looking for gen AI solutions and large language model expertise,” and that “in terms of margins,” the company is “negotiating with [cloud-service providers] to upsell on top of existing infrastructure and/or full-stack deals.”

B of A Securities analyst Vivek Arya, who has a buy rating on the stock, said Nvidia platforms are in increasing demand as AI becomes ubiquitous in everyone’s daily lives.

“Nvidia’s dominance in the nascent generative AI/Large Language Models (LLM) market could reshape the existing technology industry and usher in disruptive startups,” said Arya.

Nvidia’s “combination of scale and vision to invest in a full-stack, turnkey model (hardware, software, systems, services, developers) could accelerate enterprise adoption of LLMs in nearly every end market,” said Arya . “This view is shared by the largest hyperscalers/technology companies incl. Microsoft (Azure), Amazon

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(AWS), Google (GCP), Oracle

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(OCI) and others who see partnering with Nvidia as a more effective way to roll out LLM-based applications.”

Read: Nvidia CEO expects AI revenue to grow from ‘small, small, small’ to ‘quite large’ over next 12 months

Google on Tuesday launched a new AI product, Bard, one of several new generative AI products looking to monetize OpenAI’s ChatGPT — backed by a multi-billion dollar investment from Microsoft Corp.

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– got a lot of buzz. Also Adobe Inc.

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,
announced an AI product called Firefly at its own event on Tuesday, a “co-pilot” technology intended to help create content within its own products, which was also highlighted by Nvidia.

Nvidia shares are up 2.9% this week and 81% year-to-date, while the S&P 500 index

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is up 0.5% for the week and 2.5% for the year, and the tech-heavy Nasdaq Composite Index

COMP

rose 0.3% and 11.5% respectively.

Of the 46 analysts tracking Nvidia, 32 have a buy-grade rating, 13 a hold rating and one a sell rating, along with an average price target of $261.69, according to FactSet data.