Nvidia's 'dominant A.I. leadership' is clear after GTC developer conference, Wall Street analysts say

Published Wed, Mar 22 20236:53 AM EDTUpdated Wed, Mar 22 202312:08 PM EDT

If there's one takeaway from Nvidia 's developer conference, it's the computing firm's dominant leadership in artificial intelligence, according to Wall Street analysts. Nvidia unveiled new products and partnerships at its GTC conference on Tuesday that gave analysts confidence in the chipmaker's growing AI capabilities. The firm unveiled CUDA Quantum, a platform for developers to build quantum algorithms. Investors piled into Nvidia shares this year as they sought ways to play the growing AI trend. Nvidia shares are 79% higher in 2023 after plunging 50% last year. NVDA 1Y mountain Nvidia shares 1-year Following the GTC conference, Bank of America's Vivek Arya reiterated a buy rating on Nvidia and raised his price target, saying Nvidia's AI capabilities only expands its total addressable market. While citing Nvidia's partnerships with Microsoft, Amazon, Google and others, Arya said Nvidia's dominance in the generative AI and the large language model market could "reshape the existing tech industry." The product and partnership announcements "fundamentally widen NVDA's competitive moat while expanding oppty. to a multi $Tn+ IT/Infrastructure as a service industry TAM from narrower chip-only industry opportunity," Arya wrote to clients Tuesday. "NVDA's combination of scale and vision to invest in a full-stack, turnkey (hardware, software, systems, services, developers) model could accelerate the adoption of LLMs by enterprises in almost every end-market," Arya added. What's more, Arya's $310 price target, increased from $275, implies shares can jump 18% from Tuesday's closing price of $261.99. Meanwhile, Goldman Sachs' Toshiya Hari reiterated a buy rating on Nvidia, saying the new products solidify the chip company's position as a "key enabler of AI." Hari's 12-month price target of $275 means shares can rise another 5%. "While we are not making any changes to our forward estimates, we come away from the event incrementally positive on the stock with the new offerings (e.g. inference platforms, DGX Cloud, AI Foundations, and Omniverse Cloud) expected to solidify Nvidia's position as the key enabler of AI in the Cloud and across a broad spectrum of verticals that span Healthcare, Automotive and Logistics," Hari wrote in a Tuesday note. JPMorgan's Harlan Sur reiterated an overweight rating, saying Nvidia's "dominant AI leadership" is clear following the event. Still, the analyst's December 2023 target of $250 means about 4% downside from Tuesday's closing price. "With leading silicon (GPU/DPU/ Networking), hardware/software platforms, and a strong ecosystem, NVIDIA is well-positioned to continue to benefit from major secular trends in AI, high performance computing, gaming, and autonomous vehicles, in our view," Sur wrote to clients on Wednesday. "Bottom line: NVIDIA continues to be 1-2 steps ahead of its competitors in accelerated computing silicon/systems, software, and ecosystems," Sur added. Elsewhere, Morgan Stanley's Joseph Moore also reiterated an overweight rating, as well as his $304 price target, which suggests roughly 16% upside for Nvidia shares following Tuesday's close. The analyst noted that he missed upside in the stock before upgrading Nvidia shares last week , but he said he expects Nvidia will continue to outperform from here. "Chat GPT capability is not new, but it's introduction has clearly spurred a wave of investment that we think is at an early stage. Valuation is obviously expensive on both an absolute and relative basis, but with the combination of idiosyncratically strong short and long term business trends it seems likely stay that way," Moore said to clients in a Wednesday note. — CNBC's Michael Bloom contributed to this report.