Nvidia (NVDA) stocks remained strong on Thursday, rising by 1.1% in early trading after reaching over $154 the day before.
This gain is attributed to optimistic predictions surrounding the AI chip market on Wall Street.
Loop Capital analyst Anandavarua has elevated Nvidia’s price target to $250, suggesting that AI chipmaker’s market capitalization could potentially reach $6 trillion. Barua anticipates the AI chip market will expand to $2 trillion by 2028.
“We are entering a new ‘golden wave’ of General AI adoption, with NVDA at the forefront as demand strengthens beyond expectations,” Barua noted. He pointed to the growing need for AI chips from governmental sources, commitments from major tech players, and the rollout of Nvidia’s latest Blackwell AI chips.
While NVDA’s fundamentals are poised to grow further, he emphasized that the company essentially operates as a monopoly in crucial technology, possessing significant pricing power and margins.
Bank of America analyst Vivek Arya, in a memo to investors, projected a more conservative but still notable demand for AI chips, estimating it will reach $650 billion by 2030, up from $20 billion in 2025. He mentioned that Nvidia is set to be a major beneficiary as this relatively new sector develops.
Another positive indicator for Nvidia came from Micron (MU), which supplied memory chips to Nvidia’s GPUs, meeting Wall Street’s expectations for its third-quarter revenue results.
However, investor doubts lingered about Big Tech’s ability to keep investing heavily in AI, especially after a cost-effective AI model from Chinese company Deepseek drew global interest in January. This skepticism intensified when news of Deepseek’s latest AI model led to a decline in Nvidia’s stock at the end of that month.
Before reaching its recent high, Nvidia last peaked at $149.43 on January 6. Following that record, Nvidia faced challenges, particularly with the rise of Deepseek and the initiation of the trade war under President Trump.
