For those following market trends, it has been impossible to ignore the buzz around generative AI (artificial intelligence) in recent months. The craze was set in motion by ChapGPT, Open AI’s AI bot that went viral and whose tech now powers Microsoft’s Bing search engine. Afraid of getting left behind, Google has retaliated with its own conversational AI offering, Bard, laying the groundwork for a clash of these Big Tech AI stalwarts.
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Nvidia (NASDAQ:NVDA) is another tech giant that stands to gain from the widespread adoption of the tech more than anyone else, according to Piper Sandler analyst Harsh Kumar.
“In our view,” Kumar said, “Nvidia is the clear early leader in the generative AI space as we estimate that 80% of all AI workloads are currently run on NVDA chips. Looking forward, Nvidia has the ability to further capitalize on this share with their software solutions that increase the value proposition for AI customers.”
In fact, Kumar believes that the complete ChatGPT deployment stack on Azure relies on around 30,000 NVDA GPUs. Kumar also considers Nvidia’s CUDA parallel computing platform and its accompanying infrastructure to be a “killer moat” that provides a significant edge to NVDA users compared to other hardware.
This technology, more than anything else, increases entry barriers and safeguards NVDA’s GPU share against competitors vying for its AI crown. After some industry discussions, Kumar observed that due to the CUDA library’s robust presence and the convenience of accessing pre-made models within it, a user would only consider switching to alternative processors if their performance is “3-5x better” than Nvidia’s competing chips.”
Additionally, on top of the CUDA offerings, three foundational models for generative cloud-based AI services have been developed by the company and at the latest GTC were given a collective debut. These are called NeMo, Picasso, and BioNeMo.
All told, then, Kumar rates NVDA shares as Overweight (i.e., Buy) and has a $320 price target for the shares. The implication for investors? Upside of 20% from current levels. (To watch Kumar’s track record, click here)
Elsewhere on the Street, the stock garners an extra 27 Buys, 7 Holds and 2 Sells, for a Moderate Buy consensus rating. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
