Wall Street analysts on Wednesday praised Nvidia's approach to artificial intelligence, as it moves from chips and computer hardware deeper into software and services. NVDA stock continued its ascent on the news.
On Tuesday, Nvidia announced a wide-ranging portfolio of products to address the burgeoning AI market. Those products included new graphics processing units, data center hardware, AI software models and AI as a service.
At Nvidia's GTC conference, Chief Executive Jensen Huang said the company's move into AI software and services marked its largest-ever business model expansion.
"Nvidia continues to transform the business model with broad new sources of recurring software/services revenue — a message that should resonate well with investors even after this rally," UBS analyst Timothy Arcuri said in a note to clients.
Arcuri rates NVDA stock as buy with a price target of 270. But Arcuri said he is reviewing his price target.
NVDA Stock Gets Price-Target Hikes
At least eight Wall Street analysts raised their price targets on NVDA stock after Nvidia's presentation.
On the stock market today, NVDA stock rose 1% to close at 264.68. Year to date, through Wednesday's close, Nvidia stock is up 81.1%, vs. a 2.5% gain for the S&P 500 index.
Jefferies analyst Mark Lipacis reiterated his buy rating and price target of 300 on NVDA stock after the event.
"Announcements at its annual GTC conference increase our conviction that Nvidia is not just a chip company but a full-stack computing company," Lipacis said in his note to clients. Also, he drew a comparison to Apple in smartphones, vs. wireless-chip maker Qualcomm.
"We think that Nvidia's full-stack platform approach has made it the de-facto standard for AI and generative AI applications that will act as the primary source of upside over the next few years," Lipacis said.
Multiple Industries Using Nvidia AI Offerings
At GTC, Nvidia discussed AI initiatives with companies in multiple industries.
In health care, Nvidia is working with firms like medical products giant Medtronic and biotech leader Amgen. Further, it has automotive projects with China's BYD and Europe's BMW.
In telecom, AT&T has adopted Nvidia AI technologies to improve its operations. Meanwhile, in semiconductors, it is developing computational lithography advancements with ASML, TSMC and Synopsys.
Credit Suisse analyst Chris Caso maintained his outperform rating on NVDA stock after the presentation.
"Nvidia has been our top pick precisely because we think AI is the most transformative trend affecting semiconductors now, and Nvidia is the leader with a strong competitive moat," Caso said in a note.
Nvidia stock is on the IBD Leaderboard list as well as the IBD Tech Leaders list.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
