Nvidia has become one of the most hyped and hottest stocks in recent memory, as the fate of the entire market increasingly rests on the AI chip leader.
At one point this year, the stock accounted for more than a third of the S&P 500’s gain, and some investors even held watch parties for Nvidia’s earnings calls.
Nvidia’s astronomical growth to a $3 trillion company has also led many on Wall Street to question whether the stock can sustain further gains, while the AI boom is poised for further upside. Some people see it as promoting this, which has caused some disagreement.
This leaves investors wondering, “Should I buy or sell Nvidia stock now?”
Bank of America analysts have an answer. In a note on Thursday, they reiterated their Buy rating on Nvidia stock and raised their price target from $165 to $190, suggesting a potential upside of 38% from Friday’s closing price.
At $190 per share, Nvidia’s market capitalization would explode from the current $3.4 trillion to $4.7 trillion.
In fact, BofA is so bullish on Nvidia stock that analysts call it a “generational opportunity” and estimate the total addressable market for AI accelerators to be more than $400 billion.
“AI models (demand) continue to evolve, and the frequency of new LLM model releases has now increased to 3-5 per year per developer (OpenAI, Google, Meta, etc.) and 10 per new major generation. “~20x more compute is required.There is a training need,” the analyst said.
Their confidence in Nvidia is further enhanced by other companies in the chip space such as Taiwan Semiconductor and ASML, both of which have recently shown strong AI demand. BofA’s meetings with Broadcom and Micron executives, as well as comments from AMD, provide similar signals.
Meanwhile, Nvidia CEO Jensen Huang also touted the huge demand for his company’s next-generation AI chips.
“Blackwell is operating at full capacity, on schedule, and the demand for Blackwell is extraordinary,” he told CNBC earlier this month. “Everyone wants to have the most, and everyone wants to be the best.”
Adding to BofA’s bullish case for Nvidia are its undervalued enterprise partnerships with the likes of Accenture, ServiceNow, and Microsoft, as well as software products that strengthen Nvidia’s dominance in hardware. Together, these create a deeper overall Nvidia ecosystem for AI.
Additionally, BofA estimates that Nvidia could generate more than $200 billion in free cash flow over the next two years, rivaling even Apple.
Earnings reports later this month from big tech companies developing AI technology, including Microsoft, Google and Amazon, should provide more insight into demand. And NVIDIA is scheduled to report on November 20th.
story continues
While some on Wall Street are skeptical that big investments in AI are yielding returns, the technology sector is in a fierce race to be the first to get in on the latest advances in AI.
“The pace of new model development continues to increase,” BofA said. “LLM in particular is being developed for both larger size and better inference capabilities, both of which require higher training intensity.”
This article originally appeared on Fortune.com
