Citi has raised its price target for NVIDIA shares to $150, citing strong demand for artificial intelligence (“AI”) agents from businesses and government agencies. AI agents are AI-powered assistants that can carry out tasks and make decisions independently, with revenue from the chips powering these tools expected to make up nearly 50% of Nvidia’s data center unit sales. Citi believes that Nvidia’s “Retrieval-Augmented Generation” platform could be central to these AI agents and estimates that AI adoption is only one-third complete.
Despite Nvidia’s leading position in the AI chip market, startups such as Recordedwhich and Groq are looking to compete with the company. Recordedwhich has raised $120 million and claims to offer faster and cheaper chips than Nvidia’s upcoming offerings, with backing from prominent investor Peter Thiel. Groq, valued at $2.5 billion, specializes in AI inference and believes their chips excel in enabling AI language applications.
While Nvidia’s stock price has experienced recent volatility, Barron’s warns that it could potentially fall to $102.29, representing its 50-day moving average. Despite a 7% decline in the past five days, Nvidia’s shares are still up 10% in the last month and 40% in the past three months. Larry Ramer, a seasoned US stocks researcher and writer, does not hold any positions in Nvidia and expresses his opinions independently from InvestorPlace.com’s publication guidelines.
In conclusion, Citi’s optimistic outlook on Nvidia’s growth potential in the AI market is countered by the emergence of competitive startups aiming to challenge the company’s dominance. While Nvidia’s stock price may face near-term challenges, its strong performance over the past months suggests continued investor interest in the company’s future prospects.
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https://investorplace.com/2024/06/citi-just-raised-its-price-target-on-nvidia-nvda-stock/
