Nvidia saw a 3% increase on Wednesday, driven by renewed optimism from BofA, placing it at the top of the Street’s 2025 Semiconductor Top Picks. As of the latest data, BofA holds approximately 2.70% of its portfolio in NVDA stock.
BofA analysts maintained a “Buy” rating for NVIDIA with a price target of $190, citing the company’s dominant position in artificial intelligence, gaming, and data centers.
The artificial intelligence (AI) boom has propelled chipmaker Nvidia to become 2024’s largest global gainer in market capitalization, reaching a value of $3.28 trillion by the end of the year, according to Reuters. Nvidia’s market valuation significantly increased from $1.2 trillion at the end of 2023, driven largely by demand for its AI chips.
Nvidia’s position in the market
Nvidia is now the second-most valuable publicly listed company globally, following Apple, which neared a $4 trillion valuation as investors anticipated benefits from its AI enhancements. Other top companies in market value for 2024 included Microsoft at $3.1 trillion, and both Alphabet and Amazon, each around $2.3 trillion.
The AI boom has contributed to remarkable growth in the technology sector, with companies across various domains reporting substantial revenue increases and attracting considerable investment. A report from HSBC Innovation Banking noted a significant shift in U.S. venture capital towards AI firms, with the funding for AI companies approaching levels allocated to the rest of the venture market. HSBC U.S. Innovation Banking Head Dave Sabow commented on the unprecedented consolidation within the AI sector, stating, “Venture capital has always gravitated toward transformative industries, but the level of consolidation we’re seeing within one category is unprecedented.”
Throughout 2024, Nvidia solidified its lead in the AI market by introducing new hardware and tools, including the Blackwell B100 and B200 GPUs, which enhanced generative AI capabilities. Additionally, Nvidia launched the $249 Jetson Orin Nano Super Developer Kit, aimed at enabling smaller companies to access AI development. The company also formed numerous partnerships across key sectors.
Nvidia’s Blackwell GPUs are so hot, they could bake a cake
Nvidia CEO Jensen Huang remarked in November that the trends in AI services are “really just beginning,” predicting sustained growth and modernization that would create new industry opportunities for several years.
Nvidia’s current trajectory indicates strong performance ahead of significant events like CES 2025. The company has already achieved a market cap exceeding $3.4 trillion, primarily due to its foundational role in the ongoing AI boom. Major companies such as OpenAI and Meta have heavily invested in Nvidia’s processors, a trend expected to continue into 2025.
Analyst outlook and CES 2025
On January 6, 2025, Jensen Huang will deliver the opening keynote at CES, where he is anticipated to announce the highly anticipated RTX 5000 series GPU and discuss various topics related to AI, robotics, and automotive applications. Analysts tracking Nvidia have expressed considerable optimism, with 20 out of 21 maintaining a “buy” or equivalent rating. Bank of America and others have distinguished Nvidia as a top semiconductor pick for 2025.
Following a remarkable performance in 2024, where Nvidia stock surged approximately 170%, analysts are particularly focused on the demand for Blackwell GPUs, utilized in generative AI processes. Citi analysts expect Nvidia to raise sales expectations for Blackwell due to increased demand for AI-driven solutions in sectors like warehouse operations and manufacturing.
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Featured image credit: Kerem Gülen/Ideogram
