(Bloomberg) – Nvidia Corp.’s annual artificial intelligence conference is just days away, and hopes are high that the chip maker will announce news that will keep its stock price on fire.
Most Read Articles on Bloomberg
“Nvidia GTC,” the company's graphics processing unit technology event, has quickly become the global AI conference for developers. It will be held in San Jose, California from March 18th to 21st, and CEO Jensen Huang is scheduled to speak on the first day. His comments could help Nvidia stock end its wild swing and resume its rally of more than 80% this year.
“It's a big catalyst, not just because of the industry penetration, but also because it probably gives us more information,” said Ted Mortenson, technology desk strategist at Robert W. Baird & Company. He likened the gathering to Apple's annual product launch. .
Huang typically begins the event by introducing new products and outlining his latest vision for the direction of technology. He will be under pressure to repeat the huge success of his H100 chip for data centers and showcase innovations that solidify his Nvidia's leading position in this lucrative market.
This year's announcement carries more weight, as Nvidia's 2024 earnings alone will add $1 trillion to the company's market value, propelling it to the top-performing spot on the S&P 500 index. It's been a tumultuous time for investors since the record closing price on March 7th. Stocks posted their first two-day decline in five months on Tuesday, but fell again on Wednesday. Shares fell more than 1% in early trading Thursday.
Some of that volatility is likely due to traders positioning ahead of next week's event. Option data shows investors are paying increasing premiums on calls as the meeting approaches, especially for short-term contracts, to benefit from rising prices.
“It's like introducing an Apple product; everyone wants to be in front of it,” Mortenson said. “The million dollar question is whether the news after Jensen's keynote will sell it.”
This event is so significant for stock prices that Bank of America analysts led by Vivek Arya are calling it the “AI Woodstock.” Ahead of the conference, they raised their price target on NVIDIA from $925 to $1,100.
Despite nearly quadrupling in the past 12 months, NVIDIA's valuation suggests it still has room for further upside, according to BofA. The current stock price trades at a lower multiple than when ChatGPT was launched in November 2022, Arya wrote.
And Wall Street is overwhelmingly bullish on Nvidia going into the event. Analysts surveyed by Bloomberg gave the company a buy rating of 60, a hold rating of 7, and a sell rating of 0.
“What we've seen so far, including where the level of demand is and probably our own projections for the next 12 to 18 months,” TD Cowen analyst Matthew Ramsay said in an interview. “We are very relieved and confident that the upside is better than all predictions.” He gives NVIDIA an outperform rating and a $900 price target.
While expectations are positive heading into the San Jose event, analysts and investors alike believe that NVIDIA stock is trading close to technically overbought levels and could trigger further declines. It has recognized. Because of its size (it has soared to the top three stocks on the S&P 500 this year), a sharp move in any direction can shake up the entire market.
Chris Carey, a portfolio manager at the Carnegie Investment Council, said Nvidia “is a name with very high expectations, so there's pressure to continue to perform.” “If not, it will be a surprise in the short term, but then it will also be an opportunity.”
In addition to concerns that the hype surrounding Nvidia's AI leadership is taking root in the stock, there could be more positive momentum depending on what comes out of the events that have historically pushed stocks higher. There is also.
“There's so much speculation and over-exuberance surrounding this name that it hardly ever trades on valuation anymore,” Mortenson said. “In other words, believe in your dreams, and they will become reality.”
top technology stories
-
Hon Hai Precision Industry Co. reported a strong profit increase for the second consecutive quarter as favorable AI hardware sales offset weak demand for iPhones and electronics.
-
ByteDance's human resources chief will take over the reins of the company's much-shrunken gaming division and refocus the business on more personal content, avoiding a head-on clash with Tencent Holdings.
-
SoftBank Group Corp. is considering a possible investment in Mistral AI, a French company that has emerged as Europe's most popular artificial intelligence startup, according to people familiar with the matter.
-
Reddit told potential investors in its initial public offering that it expects sales to increase by more than 20% in 2024 from a year earlier, according to people familiar with the matter.
-
The fate of an app used by 170 million Americans is now in the hands of 100 senators. Even before the House of Representatives passed a bill Wednesday 352-65 that would ban TikTok unless its Chinese owners sell it, the short-video app had turned its lobbying efforts to the Senate.
Earnings will be paid on Thursday
-
pre-market
-
After marketing
-
adobe
-
smart seat
-
pager duty
-
blend lab
-
kodak
-
—With assistance from David Marino and Ian King.
(Updates stock price movements when the market opens)
Most Read Articles on Bloomberg Businessweek
©2024 Bloomberg LP