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Nvidia (NASDAQ:NVDA) is a dominator in graphic processing units for artificial intelligence applications. Yet, competition might make traders worried about NVDA stock. Nevertheless, Nvidia is poised to maintain a sizable majority of the AI chip market, so investors shouldn’t fret or dump their shares.
Indeed, the long side of the trade is the right one. Short-selling Nvidia shares in 2023 has been a terrible strategy. As we’ll see, at least two prominent Wall Street experts envision Nvidia continuing to benefit from the AI application industry’s explosive growth. So, don’t give up on Nvidia and don’t make any hasty trades that you’ll probably end up regretting.
Goldman Sees NVDA Stock Surpassing $600
Once again, the short-sellers have been wrong and could incur more losses by betting against Nvidia. The next move could be substantially higher, as Goldman Sachs analyst Toshiya Hari published a “buy” rating and a $605 price target on NVDA stock.
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As you might expect, Hari hinted at Nvidia’s position as an AI chip manufacturing leader. The Goldman analyst cited Nvidia’s “competitive moat and the urgency with which customers are developing/deploying increasingly complex AI models.”
However, let’s not ignore Nvidia’s importance as a supplier of hardware that’s essential for data center applications.
On that topic, Hari sees “the combination of a strong/broadening demand profile in Data Center and an improving supply backdrop supporting sustained revenue growth through CY2024” for Nvidia.
Hari expects Nvidia to “maintain its status as the accelerated computing industry standard for the foreseeable future.” If the Goldman analyst is right, there’s no reason for NVDA stock to fall short of his $605 price target.
Will OpenAI Pose a Problem for Nvidia?
The skeptics and short-sellers will always find excuses to worry about Nvidia. Here’s an example: a Reuters report stated that ChatGPT developer OpenAI is “exploring manufacturing its own AI chips.
The worry warts should take the time to read the full story, though. Apparently, one option being explored by OpenAI is “working more closely with other chip makers including Nvidia.” So, Nvidia won’t necessarily be left out of the equation.
It seems that analysts with Citigroup aren’t overly concerned about this news item. Even while they acknowledged the Reuters report, the Citigroup analysts “continue to expect Nvidia to maintain ~90% share in the AI GPU market for the next 2-3 years.”