There’s a growing movement in tech stocks to take advantage of the so-called “AI Arms Race.” The company that comes out ahead will lead technological development and probably share prices for some time to come thereafter. Based on word from Bank of America analyst Vivek Arya, the most likely candidate to come out ahead in the AI Arms Race is Nvidia (NASDAQ:NVDA).
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We’ve heard plenty about Microsoft (NASDAQ:MSFT) and its connection to ChatGPT. We’ve also heard plenty about Alphabet (NASDAQ:GOOG) and its well-funded push therein. But Nvidia has been doing this for years. It’s been putting a lot into semiconductors for AI applications and is thus setting itself up to be the main supplier of bullets in the AI Arms Race.
Granted, one of Nvidia’s major markets—the consumer field—has been in open decline of late, and the stock has seen huge triple-digit growth over the last few years. However, when considering Nvidia’s likely place of prominence in AI and its gains in data center operations, the chances of a significant fall-off from here are fairly unlikely. Even Vivek Arya looks for some “stock volatility” in the near term. However, the point remains that Nvidia has a presence in several market sectors that insulates it from losses in any one particular category.
Analysts are wholly on Vivek’s side here. Wall Street consensus currently calls Nvidia a Strong Buy. However, thanks to its average share price target of $209.19, Nvidia stock also comes with 8.35% downside risk. Given what we’ve already heard, it looks less like downside risk and more like stale price targets.
