Bank of America equity analyst Vivek Arya remains optimistic about Nvidia Corp., even as the chipmaker becomes the largest company in the world, surpassing Microsoft Corp. Arya believes any short-term volatility due to Nvidia’s recent rise will be short-lived, citing the company’s strong fundamentals, attractive valuations, and several growth factors.
One key factor is the generative AI hardware cycle, which Arya estimates to be a long-term opportunity valued at over $300 billion. Additionally, Nvidia’s new Blackwell AI Accelerator Systems are in high demand from cloud customers, while the increasing need for local AI and software monetization is driving growth.
Despite Nvidia’s impressive performance post-second-quarter 2024 earnings, Arya pointed out the differences between the current AI-driven surge and the dotcom rally, emphasizing that the current growth is driven by mission-critical AI applications.
Bank of America maintains a Buy rating on Nvidia shares, projecting a potential upside of 10.2% over the next year. Nvidia’s Vice President of Hyperscale and HPC Computing highlighted the company’s strength in optimizing its hardware, software, and systems, particularly in the development of large language models (LLMs).
Nvidia’s expanding software services, including Nvidia Inference Microservices (NIM), are making it easier for customers to deploy enterprise AI applications quickly. NIM has over 40 microservices available across various sectors, with partnerships with companies like SAP, ServiceNow, CrowdStrike, Snowflake, NetApp, Dell Technologies, Adobe, and Synopsis.
Overall, Arya sees Nvidia’s software services as key to unlocking the next stage of growth while strengthening its relationship with business users. With a focus on generative AI and continuous innovation, Nvidia is well-positioned to capitalize on the growing demand for AI technology across industries.
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https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39415117/nvidia-analyst-says-the-ai-party-isnt-over-any-volatility-likely-to-be-short-lived