Nvidia stock rocketed 239% in 2023, but the party is far from over for the AI-chip maker, Wall Street analysts say.
Nvidia was the top performer among the Magnificent Seven stocks in 2023. That makes it the Yul Brynner or Denzel Washington of the group, depending on which version of the film you prefer. But will it be a hero or zero in 2024?
At least four Wall Street firms this week put Nvidia stock on their buy lists for 2024. They include Goldman Sachs, KeyBanc Capital Markets, Piper Sandler and Wells Fargo.
Piper Sandler analyst Harsh Kumar said Nvidia is his "top pick" among large-cap semiconductor stocks for 2024. He rates Nvidia stock as overweight with a price target of 620.
On the stock market today, Nvidia stock climbed 0.9% to close at 479.98.
AI Spending Boom To Continue
Nvidia will continue to gain from strong sales of graphics processing units, or GPUs, to cloud data centers for artificial intelligence applications, Kumar said in a client note Thursday. The company is a prime beneficiary of the generative AI boom, he said.
"We are expecting the GPU accelerator and Gen AI-driven compute markets to perform remarkably well throughout calendar year 2024," Kumar said. "Nvidia maintains a dominant position in its GPU data center products as well as the surrounding hardware, software and networking infrastructure."
Kumar also likes Advanced Micro Devices in the AI space as it increasingly takes on Nvidia. He reiterated his overweight rating on AMD stock and raised his price target to 165 from 150.
AMD stock rose 0.5% to close at 136.01 on Thursday.
Nvidia Stock Preferred Over AMD
Wells Fargo analyst Aaron Rakers said he prefers Nvidia stock to AMD stock at current levels and sentiment, but has buy ratings on both. In a client note Wednesday, he called Nvidia his "AI top pick."
Rakers kept his 675 price target on Nvidia stock. Meanwhile, he raised his target on AMD stock to 165 from 130.
KeyBanc analyst John Vinh said Nvidia is one of his "key stock ideas" for 2024. He rates Nvidia stock as overweight with a price target of 650.
Nvidia "remains the best positioned play for generative AI," he said in a client note Wednesday.
"Despite significant appreciation in 2023 (+239%), we expect outsized AI tailwinds to sustain, supported by growing demand backlog and incremental supply, while possibly still constrained," Vinh said.
Elsewhere, investment bank Goldman Sachs on Tuesday said Nvidia stock is on its U.S. Conviction List. The firm rates Nvidia as buy with a price target of 625.
Nvidia is on two IBD lists: Leaderboard and Tech Leaders.
Nvidia stock has formed a flat base with a buy point of 505.48, according to IBD MarketSmith charts.
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