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Nvidia unveiled its DGX cloud service earlier this year.
Courtesy of NVIDIA
Raymond James said
Nvidia
’s
new artificial intelligence cloud offering for corporations could become a large business over time.
Analyst Srini Pajjuri reaffirmed on Thursday his Strong Buy rating for
Nvidia
stock (ticker: NVDA) and his $450 price target.
Earlier this year, Nvidia unveiled its DGX cloud service, which allows companies to rent AI computing capacity powered by the chip maker’s semiconductors.
Nvidia DGX Cloud’s AI-as-a-Service is a significant long term opportunity, he wrote. The chip maker has AI “models that enterprises can leverage to build customized large language models with proprietary enterprise data.”
In early trading Friday, Nvidia shares were up 3.7% to $423.46.
Pajjuri noted how the company’s management has said there are four million developers who use Nvidia’s CUDA programming platform. CUDA—with its helpful software tools and libraries related to AI—has laid the groundwork for Nvidia’s chip dominance in the latest wave of AI applications.
Nvidia’s products have high exposure to generative AI, which has been trending this year. The technology ingests text, images, and videos in a brute-force manner to create content. Interest in this form of AI was sparked by OpenAI’s release of ChatGPT late last year.
The analyst also said he is confident about Nvidia’s ability to generate robust financial results, citing the upcoming AI-related product launches later this year.
After a recent meeting with Simona Jankowski, Nvidia’s head of investor relations and strategic finance, “we walked away comfortable with our view that Gen AI adoption will continue to drive strong growth for the next several quarters,” he wrote.
In regards to potential competition, Nvidia’s AI “eco-system advantage would be hard to match,” he added.
Write to Tae Kim at [email protected]
Source: https://www.barrons.com/articles/nvidia-stock-price-rating-2afe7a72?siteid=yhoof2&yptr=yahoo