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Bank of America is excited about Nvidia ‘s long-term potential within artificial intelligence. Analyst Vivek Arya reiterated his buy rating in Nvidia and upped his price target by $40 to $255. That new target implies the graphic cards maker’s stock could rally 17% from where it closed Monday. He said the company could specifically stand to benefit from generative AI, which is focused on creating new outputs based on data already understood by the system. ChatGPT is one of the best-known examples of generative AI. “NVDA’s full-stack of accelerated silicon/systems/software/developers positions it uniquely to lead the nascent generative AI arms-race among global cloud and enterprise customers,” he said in a note to clients Tuesday. The stock gained nearly 1% following the note. It’s up just over 49% so far this year, reclaiming a sizable chunk of the 50.3% it lost in 2022. Arya said the company’s sales and earnings could grow at compound annual rates between 25% and 34% as generative AI adoption increases. And generative AI should increase the total addressable market of its accelerator business to $62 billion by 2027. He said the stock could see volatility following a recent rally, but it should be short lived. To be sure, Arya said generative AI is in its “requisite hype cycle,” so predicting an adoption pace means making lots of assumptions. But despite the potential variables, he said the move to accelerated computing should help the company. — CNBC’s Michael Bloom contributed to this report.
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