NVidia Corp. (NVDA) shot up by 6.3% to reach its first record close since August 7. Shares trading volume reached a whopping 33.5 million, compared to the regular average of about 15.2 million shares.
This jump took place after the graphics-card manufacturer was given a really positive rating by Evercore analyst CJ Muse. Muse stated that investors have seriously undervalued the growth and importance of Artificial Intelligence or AI. According to him, the company’s prices should skyrocket by 40% from current levels. He gave the company an “Outperform” rating, and also increased his price target from the current $180 by a massive 39% to $250. The average target kept by most of the 36 analysts covering NVidia is $160.55. The second highest target is at $200, which is 25% less than his predictions.
NVidia’s stocks have soared by 74.49% this year, while the Semiconductor Index, PHLX, has jumped a smaller 26.5% and the S&P 500 crawled up 11.7%.
Evercore is stating that they believe NVidia is worth $45 billion more than its current market cap. Muse wrote in a note to his clients that the AI market is still hugely underrated. The market hasn’t even started its growth yet and its potential for growth is phenomenal. And in that market, NVidia is going to be the benchmark in AI computing.
The difference between augmented reality and AI is this. With augmented reality, you could get great graphic directions to a store. With AI, the processor will be able to sense you are moving towards your destination, order the product you want and automatically charge your account as soon as you pick up your order – without you having to do anything other than get there.
This kind of processing requires a lot of power, and that’s where NVidia’s graphics processing chips jump in. Thanks to the company’s culture of constant research and innovation, it started looking for alternative uses for its graphics cards back in the 90s. This led to the development of their CUDA processing platform in 2006. The powerful graphics chip and the CUDA platform have since become a perfect combination to develop the next levels of AI computing.
Today, NVidia graphics cards are a must have in all Training programs. And it is a market leader in PC gaming, with better graphics and more realistic in game experiences than ever before.
The company is also expanding its data center business, which Evercore believes will outperform the gaming segment very soon. NVidia also just released its new Volta architecture for computer chips. These are already being adopted in major data centers and this business is expected to be one of the company’s largest revenue generators in the next future.
Autonomous driving is also something NVidia is working on. Tesla, one of the world’s largest electric car manufacturers, is already using the company’s “Drive” platform in its cars. Using this platform, Tesla has already collected billions of miles worth of driving data, which is helping the company fine tune its autonomous driving program.
The future of computing is Artificial Intelligence. It is going to be a part of pretty much every single computing process. And with NVidia dominating the market with its futuristic technology, Muse expects the company to report earnings per share of $10 in the next few years. This would be up from the current earnings per share of $2.65. A jump from $2.65 to $10 would be a 277.36% increment in earnings per share.
Overall, NVidia has been given a huge bump with Evercore’s feedback on their market worth and future performance.