Nvidia (NVDA) stock saw a nearly 5% rise on Tuesday, buoyed by optimistic Wall Street forecasts and news of a significant chip deal, just a day before the tech giant’s earnings report. Analysts pointed to surging demand for Nvidia’s cutting-edge AI chips and continued investment in artificial intelligence infrastructure as key drivers of the stock’s performance.
Stifel analyst Ruben Roy raised Nvidia’s price target to $180 from $165, emphasizing strong market trends and the company’s strategic positioning in the AI space. Roy highlighted a “diverse set of data points,” including robust spending by hyperscalers on AI infrastructure and growing demand for Nvidia’s latest Blackwell AI chips. “We believe that NVDA is well positioned in markets that combine to yield an overall TAM [total addressable market] of more than $100 billion exiting 2025 and a longer-term opportunity funnel that could approach $1 trillion,” Roy noted in a client memo.
Truist Securities’ William Stein echoed the sentiment, raising his price outlook to $167 from $148. Both analysts underscored Nvidia’s leadership in the AI and GPU markets, which continue to benefit from exponential growth in AI applications.
Adding fuel to Nvidia’s rally, the company secured a landmark deal with cloud provider Nebius Group (NBIS). Nebius announced plans to launch its first GPU cluster in the United States, featuring up to 35,000 Nvidia chips. GPU clusters, which consist of interconnected graphics processing units, are critical for powering artificial intelligence applications, including large-scale machine learning models.
According to Bloomberg consensus data, Nebius’ order represents about 4% of the Hopper AI chips Wall Street analysts estimate Nvidia shipped during the October period. The deal underscores Nvidia’s role as a dominant supplier in the AI chip market, although the company declined to comment on the specifics of the agreement.
The momentum around Nvidia reflects broader enthusiasm for AI technologies. As companies ramp up investments in AI-driven solutions, the demand for high-performance computing hardware, like Nvidia’s GPUs, continues to rise. The company has been a key player in enabling AI advancements, leveraging its powerful chips to support applications in data centers, autonomous vehicles, and generative AI systems.
Nvidia’s upcoming earnings report, scheduled for release on Wednesday, is expected to provide further insights into the company’s financial performance and outlook. Analysts predict strong revenue growth fueled by AI-related sales, which have driven record-breaking earnings in recent quarters.
The tech giant’s stock has been a standout performer in 2024, capitalizing on the AI boom. Tuesday’s rally reinforces investor confidence in Nvidia’s ability to maintain its leadership position and capitalize on its expanding total addressable market.
As AI continues to transform industries, Nvidia remains at the forefront, poised to benefit from the surging demand for next-generation computing technologies.