Nvidia Stock Shakes Off AI Chip Competition

AI chip introductions this week from Intel (INTC), Marvell Technology (MRVL) and Alphabet‘s (GOOGL) Google are showing that Nvidia (NVDA) isn’t the only game in town for artificial intelligence processors. But Nvidia stock appears to be shaking off the news.

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

Nvidia is the IBD Stock Of The Day as the AI leader bounces back from a short pullback.

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

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

Aggressive investors could use a decisive move above the stock’s 21-day exponential moving average line and a break above its downward-sloping trend line as early entry points.

Nvidia Stock Takes ‘Refreshing Pause’

Nvidia stock notched a record high of 974 on March 8, ahead of the company’s GTC conference. At that 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 pause.” He noted that the sell-off is the ninth time Nvidia stock fell over 10% since ChatGPT launched in late 2022. OpenAI’s generative AI chatbot kicked off the AI investment frenzy.

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

‘Overstated Competitive Noise’

He called the Google and Intel chip announcements “overstated competitive noise.” Nvidia remains the go-to AI chip provider, Arya said.

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

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

“We have seen nothing thus far that changes this view,” he said. “And indeed Nvidia’s Blackwell product with its leading training and inference performance, plus Nvidia’s strong enterprise presence makes us more confident in the company’s ability to maintain and or gain share.”

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

And on Wednesday, Facebook parent Meta Platforms (META) announced its latest custom-made chips designed to support generative 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 Hike

Additionally, Morgan Stanley analyst Joseph Moore on Wednesday raised his price target on Nvidia stock to 1,000 from 795. He 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 on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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