According to the Semiconductor Association, the U.S. semiconductor industry is pivotal to the global economy, generating approximately $77.4 billion in revenue in 2024, with a projected growth rate of 10.4% annually. In 2023, over 1 trillion semiconductors were sold globally, underscoring their critical role in technology and innovation.
The shares of NVIDIA were closed at $143.71 per share, increased around 4.14 percent as compared to the previous closing price of $138 per share, the company has a market capitalization of $3.43 trillion.
Brokerage Recommendations:-
Bank of America, one of the well-known brokerages globally, gave a ‘buy’ call on the recently listed semiconductor stock with a target price of $ 190 apiece, indicating a potential upside of 32 percent from Monday’s closing price of $143. per share.
Brokerage Rational:-
The upside will be driven by Nvidia’s competitive advantage over rival chipmakers, as well as the “generational opportunity” in the AI sector, which is estimated to reach $400 billion, according to analysts.
BofA expects the AI accelerator market to reach $280 billion by CY27E (and eventually $400 billion+) from ~$45 billion in CY23, owing to an improved NVDA Data Center Compute forecast. “AI models (demand) continue to evolve,” the bank stated.
Furthermore, the brokerage highlights the expanding presence of artificial intelligence in organizations, where NVDA is the preferred partner. “NVDA’s collaborations cover several sectors (e.g., Accenture, ServiceNow, Microsoft), and solutions such as AI Foundry, AI Hubs, and NIMs are critical to its AI leadership, not just on the hardware but also on the systems/ecosystems side.
Remarkable return:-
The share of the company has given multifold time returns of 198 percent as of this year and 234 percent in one year. Recently, the company has crossed Microsoft to become 2nd largest company by market capitalization in the world.
Financial condition:-
The company earned around $13.51 billion from graphics which is a 13.52% increase YoY, and $47.40 billion from computing and Networking which saw an increase of 214% YoY as per the 2024 financial year. This substantial increase has resulted in breakneck speed growth for Nvidia as it reflects on its share price.
Nvidia’s spending on research and development in FY24 compared to its revenue stood around 14.23%. Analysts expect that spending on AI data center construction will more than double Nvidia’s annual revenue to nearly $126 billion, according to LSEG data.
Company profile:-
Nvidia develops and sells GPUs for gaming, cryptocurrency mining, and professional applications, as well as chip systems for automobiles and robots. Nvidia’s Compute and Networking business area, which includes artificial intelligence (AI), is the company’s largest income source.
Written by:- Abhishek Singh
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