It's a Good Time to Become the Nvidia of Chip Stocks (NASDAQ:NVDA), or at least one of its investors. The company had just announced a new plan for the market, and investors were excited about the idea, sending the stock up nearly 6% as of Monday afternoon's close.
While much has been said about NVIDIA's plans to restart the Chinese market, another plan has been more quietly moving forward: the domestic market. Nvidia is rapidly developing new consumer-grade chips that will bring artificial intelligence (AI) directly into the home. Whether you want to play games, change the background of your video calls, or even create your own images, our new tip line will help you solve it. The idea of widespread use of AI is both exhilarating and frightening, and is expected to destabilize broad markets in the process.
And speaking of the Chinese market…
Nvidia's efforts to bring AI to home users are a big deal, but there's another big deal that's far less bland. Specifically, the Chinese market. We know that Nvidia is desperately trying to get a line of chips out there watered down enough to export over the objections of U.S. regulators. But the latest report suggests that the Chinese market doesn't actually want these chips. Both are Alibaba (Nasdaq: Baba) and ByteDance have made it clear they don't want chips that will hold Nvidia back. After all, if there is not a huge difference in performance, the homebrew chip looks like a better alternative, since the cost is reduced and the chip is roughly equivalent to the new version. That would be a terrible blow to NVIDIA's bottom line without a big new market to make up for the shortfall.
What is NVDA's target price?
Turning to Wall Street, analysts have a consensus rating for NVDA stock as a Strong Buy, based on 32 buys and 4 holds assigned over the past three months, as shown in the chart below. That's what I mean. Analysts currently have an average price target for NVDA after the stock has increased his 232.46% over the past year. $662 per share means an upside potential of 26.88%.
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