OpenAI, the firm behind ChatGPT, is considering developing its own AI (Artificial Intelligence) chips as it grows in scale. Per the Reuters report, OpenAI is also actively assessing a potential acquisition target that may address concerns related to the scarcity of high-priced AI chips required for the company’s expansion.
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Besides for developing an in-house AI chip or acquiring a company, OpenAI is also focusing on enhancing its collaborations with chip manufacturers such as Nvidia (NASDAQ:NVDA), which is the dominant player in the AI space, with its chips powering most of the AI applications. Furthermore, OpenAI is also focusing on broadening its supplier base beyond Nvidia.
OpenAI is rapidly expanding its operations and recently introduced the enterprise version of its AI chatbot, ChatGPT Enterprise. Further, OpenAI announced that ChatGPT can now search the internet to offer up-to-date information to users. Additionally, it can visually interpret, comprehend audio inputs, and respond verbally.
While OpenAI’s efforts to develop its own chips may ultimately prove successful, the transition process could take several years. The company is expected to maintain its dependence on corporations such as Nvidia throughout this transitional phase, as the report highlighted. This makes Nvidia a viable investment option for investors looking to capitalize on the AI wave.
With this backdrop, let’s look at what the Street recommends for NVDA shares.
Is Nvidia a Good Stock to Invest in Right Now?
Nvidia stock has gained over 206% year-to-date. Despite this substantial increase in its price, Wall Street analysts maintain an optimistic outlook on its prospects. They anticipate significant upside potential, driven by the multi-year growth opportunity arising from AI-related demand.
With 39 Buy and one Hold recommendations, NVDA stock has a Strong Buy consensus rating. Furthermore, analysts’ average price target of $644.69 implies 44.26% upside potential.
