Analyst Matthew Ramsay, from TD Cowen, has been riding high on his top chip stock pick for 2024, which has already delivered a staggering 220% gain this year. But amidst the success, Ramsay sends a clear message to Wall Street: there's no need to overthink this.

And what is Ramsay's "best idea" selection? None other than Nvidia Corp. NVDA, -2.39%, the leader in the artificial intelligence (AI) revolution. This year, as businesses scramble to adopt AI technologies following the widespread popularity of ChatGPT, Nvidia's hardware is positioned as the driving force behind this digital transformation.

As Ramsay asserts in his note to clients titled "Just 'cause it's obvious, doesn't mean it's wrong," Nvidia's accelerated computing and generative AI capabilities firmly establish its dominance in this early stage of a paradigm shift towards ubiquity. According to Ramsay, Nvidia is at the forefront of the most significant growth vector in computing history, rivaling the advent of the Internet itself.

Ramsay is particularly bullish on Nvidia's data-center business, which has experienced explosive growth this year. He anticipates further expansion driven by the company's superior technologies, track record of innovation, and strategic investments geared towards fueling growth across a wide range of AI verticals.

In conclusion, Nvidia Corp.'s remarkable journey showcases the immense potential of accelerated computing and generative AI. As the industry leader, Nvidia continues to redefine the future landscape of computing, propelling businesses into the new era of AI-driven possibilities.

Nvidia and Microsoft CEOs: Industrial Companies to Benefit Most from AI

According to the CEOs of Nvidia and Microsoft, industrial companies are set to be the primary beneficiaries of artificial intelligence (AI). This sentiment is driven by an accelerated product-introduction cadence, innovative advancements in hardware, as well as improvements across all aspects of the AI workload including training, inference, and data processing.

While rival company Advanced Micro Devices Inc. (AMD) has a strong product with the MI300X, it is believed that the market for AI hardware is extensive enough to sustain multiple winners. The total addressable market for AI hardware is projected to be significantly large.

Investors seem to undervalue Nvidia's ability to maintain demand well into the future, beyond 2025. Generative AI spending is expected to be more durable than currently perceived by many investors. Furthermore, Nvidia's expansion into selling complete systems instead of just chips opens up even greater opportunities for the company.

In light of these factors, Ramsay, an analyst, has given Nvidia shares an outperform rating and set a target price of $700.

Reference: Nvidia’s stock is now this chip analyst’s top pick — knocking out AMD

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