NVIDIA Stock Could Rise 22% as AI Spending Soars

Due to the surge in AI advancements, NVIDIA's future outlook remains strong according to investment institutions. In a report released on Tuesday, despite NVIDIA's stock doubling last year and rising another 88% this year, there is still significant room for growth. Goldman Sachs raised NVIDIA's target stock price from $1,000 to $1,100, indicating an estimated 22% upside potential from its current level.

Given NVIDIA's rapid growth rate and the sustainability of this trend in the coming years, the company's stock valuation remains relatively attractive compared to its peers. Analysts emphasized that AI continues to be NVIDIA's primary growth driver, with its data center performance in the second, third, and fourth quarters expected to benefit from robust demand for AI-related computing and networking. NVIDIA's data center revenues are projected to grow quarter-on-quarter by 10% in Q2, 17% in Q3, and 5% in Q4.

Goldman Sachs predicts that in 2024, major tech companies—Microsoft, Google, Amazon AWS, and Meta—will invest an estimated $177 billion in cloud computing, a substantial increase from $119 billion last year. These investments are expected to boost NVIDIA's revenue and profit growth, especially with the upcoming release of its next-generation Blackwell AI chip later this year.