Nvidia stock shakes up AI chip competition

AI chip introduction from this week Intel (INTC), Marvell Technology (MRVL) and the alphabet(GOOGL) Google is showing it. Nvidia (NVDA) isn’t the only game in town for artificial intelligence processors. But Nvidia stock seems to be riding the news.

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Google and Intel showed off their latest chips for artificial intelligence on Tuesday. Marvel is holding an AI-focused event on Thursday.

Nvidia is the IBD stock of the day as the AI ​​leader bounces back from a brief pullback.

In midday trading on the stock market today, Nvidia stock rose 1.7% to 867.71. Shares bounced off the 10-week moving average line, a positive sign. This show of support creates a follow-on buy area starting at around 840.

After this week, Nvidia stock should have formed a flat base with a 974 buy point, according to IBD analysis.

Aggressive investors can use a decisive move above the stock’s 21-day exponential moving average line and a break above the downward sloping trendline as initial entry points.

Nvidia stock takes ‘refreshment break’

Nvidia stock hit a high of 974 on March 8 ahead of the company’s GTC conference. At the show, Nvidia introduced its latest AI advancements and its next-generation graphics processing unit, called Blackwell.

In a client note Tuesday, BofA Securities analyst Vivek Arya called Nvidia’s recent pullback a “refreshing break.” He noted that the end of 2022 marks the ninth time Nvidia’s stock has sold off since the start of the Chat GPT.

Arya reiterated its “top pick” buy rating on Nvidia stock with a price target of $1,100.

‘Increased competitive noise’

He described the Google and Intel chip announcements as “more than competitive noise.” Nvidia is the go-to AI chip supplier, Arya said.

“We maintain our core view that Nvidia will dominate the nearly $90 billion 2024 accelerator market (growing to $200 billion by 2027) with a 75%+ share,” Arya said.

Custom chips from Google, Amazon (AMZN) and Microsoft (MSFT) will capture 10% to 15% of the market, he said. The remainder will spread across other merchant silicon providers such as Advanced Micro Devices (AMD), Intel and private companies, Arya said.

“We haven’t seen anything so far that changes that view,” he said. “And indeed Nvidia’s Blackwell product with its outstanding training and inference performance, as well as Nvidia’s strong enterprise presence, makes us even more confident in the company’s ability to retain and gain share.”

On Tuesday, Google announced its latest tensor processing unit, the TPU v5p. Meanwhile, Intel introduced its Gaudi 3 AI accelerator chip.

And on Wednesdays, Facebook Parents Meta platforms (META) announced its latest custom-made chips designed to support creative artificial intelligence. META’s second-generation Meta Training and Inference Accelerator, or META, will help power the social media giant’s ranking and recommendation systems.

Nvidia stock gets price target boost

Additionally, Morgan Stanley analyst Joseph Moore raised his price target on Nvidia stock to 1,000 from 795 on Wednesday. It has an overweight rating on the stock.

Nvidia’s business continues to strengthen, Moore said in a client note.

Nvidia stock is on six IBD lists: Leaderboard, SwingTrader, IBD 50, Big Cap 20, Sector Leaders and Tech Leaders.

Follow Patrick Seitz at X, first on Twitter, at @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.

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