After a stellar rally in the first eight months of 2023, Nvidia (NASDAQ:NVDA) stock witnessed a pullback. NVDA stock has dropped nearly 17% month-to-date. Plus, shares of Advanced Micro Devices (NASDAQ:AMD), Broadcom (NASDAQ:AVGO), and other chip makers also cooled a bit, raising concerns that the AI (Artificial Intelligence) boom could be simmering down. However, analysts’ outlook remains positive, and their price targets suggest significant upside potential for NVDA stock.
With this backdrop, let’s understand what’s in store for Nvidia shareholders in the future.
Nvidia Will Keep Riding the AI Wave
Nvidia has been one of the top beneficiaries of AI advancements. For instance, the company gained from the tremendous demand for its accelerated computing and AI platforms, which significantly boosted its Data Center segment’s revenue and led to a rally in its share price.
In the future, Nvidia is poised to gain from the higher demand for its HGX platform (also known as the engine for generative AI and large language models) from cloud service providers and consumer Internet companies. Moreover, Nvidia continues to expand its enterprise offering, supporting its leadership position in the AI space.
Echoing similar sentiments, Goldman Sachs analyst Toshiya Hari reiterated a Buy on NVDA stock on September 6. The analyst expects Nvidia to gain from solid demand for generative AI and improve its supply chain.
Besides for the momentum in the Data Center segment, Nvidia will also benefit from the acceleration in the Gaming segment, led by a recovery in demand and significant upgrade opportunities in the coming quarters. As Nvidia is poised to deliver strong growth, let’s look at what the Street recommends for its shares.
Is Nvidia Stock Expected to Rise?
Analysts’ average 12-month price target of $636.32 implies a 55.14% upside potential in Nvidia stock from current levels. Moreover, with 40 Buys and one Hold recommendation, Nvidia stock sports a Strong Buy consensus rating.
The acceleration in AI adoption and deployment, strong demand for its AI platform, and partnerships with leading technology service providers could continue to drive Nvidia’s business. Further, analysts’ average price target suggests significant upside potential from current levels.