According to S&P Global’s Andrew Chang, Nvidia’s stock price has 12 to 18 months of growth ahead.
Chang said the company’s shares will continue to “soar” for at least another year due to strong demand for its chips.
He expressed concern that AI investments could shrink in coming quarters, which could impact the stock price.
Nvidia’s stock still has plenty of upside potential, and shares of the market’s most popular chipmaker should continue to soar for at least another year, according to Andrew Chang, director of technology at S&P Global Ratings.
The banking industry veteran pointed to recent comments by Jensen Huang, who spoke at a Goldman Sachs conference in San Francisco this week and sparked a surge in NVIDIA shares. The Nvidia CEO offered further guidance on consumer demand, specifically for the company’s next-generation GPU, Blackwell.
Chang, in an interview with Schwab Network on Friday, said his comments reinforce his expectation that Nvidia’s stock price will continue to rise.
“This reinforces our view that we can maintain robust growth for at least the next 12 months,” Chang said.
Nvidia’s partners are also seeing signs of robust chip demand: Oracle, which Nvidia has a partnership with, raised its revenue forecast after reporting better-than-expected first-quarter profits, and the software company also doubled its capital spending plans for the fiscal year, all bullish signs for Nvidia.
“These are all great data points that will likely lead to good things at least for the next 12 to 18 months,” Chang said of the Jensen Huang-led company.
Still, he acknowledged some of the concerns investors have expressed. Some worry that Nvidia’s growth is unsustainable, given that the company’s stock price has risen a staggering 2,514% over the past five years.
Some analysts have warned that demand for Nvidia’s chips may not remain strong in the coming years as the company’s major customers could eventually become competitors. Apple and Microsoft, two of Nvidia’s biggest GPU customers, are reportedly working on developing their own AI chips.
“Ultimately, if Oracle, Microsoft and Amazon don’t achieve the ROI they expect, they will cut back on their orders. Hyperscale demand fluctuations are a big concern for us,” Chan said. “But, you know, these data center companies have been known to order large amounts and then shut down for a few quarters. That’s definitely something we’re watching.”
Investors should also be wary of increased regulation of AI: Bloomberg reported that Nvidia was recently the target of a new antitrust investigation by the Department of Justice, and Chan said it’s “just a matter of time” before other countries follow suit and try to regulate AI technology.
The story continues
Nvidia’s shares fell in the weeks after reporting earnings in late August but have posted fresh gains this week, along with other tech giants including Oracle and Supermicro Computer.
Wall Street remains broadly bullish on Nvidia, with analysts on average targeting the stock at $153 a share, implying a 29% upside from current levels, according to Nasdaq data.
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