(Bloomberg) — Shares of Nvidia Corp rose 5.4% Monday, as more analysts raised their price targets on the stock, in a sign of growing optimism about the chip company’s prospective results later this week.
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The average price target for the stock has been steadily rising lately, and it’s above $520, up from $505 just a week ago. The current target indicates an upside of about 15% from current levels. Nvidia is up 212% this year, compared to a 39% gain for the Philadelphia Stock Exchange’s semiconductor index. Much of the rally reflects optimism about artificial intelligence, in which Nvidia plays a major role.
HSBC, KeyBanc Capital Markets and BMO Capital Markets are among the latest companies to beef up their targets ahead of the Aug. 23 release of Nvidia’s second-quarter results. The report is expected to show significant demand for chips used in processing AI services. Revenue is expected to rise 65% from the same period last year, according to data compiled by Bloomberg.
This is one of the first reports from Nvidia where AI is expected to be the primary focus. Generative AI services such as ChatGPT were highlighted earlier this year and excitement surrounding AI applications has boosted stocks such as Nvidia. Last quarter, Nvidia made a prediction that was much stronger than expected, cementing its position as the primary recipient of AI spending.
“Although market expectations are clearly higher for Nvidia and the overall AI supply chain, we expect server AI’s bullish momentum to continue to outpace market expectations,” wrote Frank Lee, an analyst at HSBC, who has a Buy rating on the stock.
Meanwhile, KeyBanc Capital Markets expects Nvidia’s results and forecasts to be “significantly higher” than consensus expectations, given strong demand trends.
Rosenblatt Securities, Piper Sandler, UBS and Morgan Stanley have also raised targets recently.
The general consensus on Nvidia is very positive, with 90% of analysts tracked by Bloomberg recommending buying the stock.
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