Proactive Investors - NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) chips are the new AI economy’s precious commodity, that’s according to Daniel Ives, analyst at Wedbush, who rates the semiconductor firm at ‘outperform’ and today published bullish commentary of its prospects.
Ives, in a note, called Nvidia founder and chief executive Jensen Huang “the godfather of AI” as Nvidia this week became ‘the world's most valuable company’ – with its market capitalisation now leapfrogging both Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT).
All three tech-giants are now in the race to be the first $4 trillion company, the analyst highlighted, with the growth being driven by AI.
He tips Nvidia to lead the pack, thanks to its essential hardware.
“Nvidia's GPU chips are in essence the new gold or oil in the tech sector as more enterprises and consumers quickly head down this path with the 4th Industrial Revolution well underway,” Ives said in the note.
“Its all about the pace of data center AI driven spending as the only game in town for GPUs to run generative AI applications all go through Nvidia.”
He added: “While the bears will continue to harp on valuations of Nvidia, Microsoft, Palantir (NYSE:PLTR), MongoDB (NASDAQ:MDB), ServiceNow (NYSE:NOW), and other AI pure plays, we believe investors that have missed the biggest transformational tech stocks the last decade including Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), Meta (NASDAQ:META), Apple, Alphabet (NASDAQ:GOOGL) among many others have dogmatically stuck with the forward PE valuation approach on these unique tech stories.”
Ives reckons a ‘spending wave’ over the next decade will see $1 trillion of ‘incremental AI spend”.
This wave is core to a bullish view of the market, which will see “the strong get stronger”, according to Ives.
“In a nutshell, we believe this tech bull market has legs through 2025 that will ultimately broaden out to the rest of software, consumer tech, cyber security, semis, and infrastructure over the next 12 to 18 months,” the analyst said.
“This will be a tech market in which the strong will get stronger as AI technology helps Big Tech Stalwarts monetize their massive installed bases across the enterprise (Microsoft, Oracle (NYSE:ORCL), Dell, Amazon, etc) and consumer landscape (Meta, Apple, Google) over the coming years.”