Just weeks into the new year, tech stocks are scorching hot.
Look at Nvidia (NVDA), for example.
Since the start of January, it ran from about $475 to a high of nearly $572. All thanks to explosive demand for chips.
The company recently made several big announcements at CES 2024, which included new chips for generative AI, PCs, gaming, and newer partnerships. NVDA also announced its newest GeForce RTX graphics cards, which offer 4K resolution and ray tracing. Analysts at KeyBanc also raised their price target on NVDA to $740, with an overweight rating.
Advanced Micro Devices (AMD) ran from about $135 to nearly $170 in weeks.
Again, thanks to AI chip demand.
KeyBanc analysts raised their price target on AMD to $195. Even Barclays raised its target to $200 from $120, noting AMD could see $4 billion in AI chip sales this year. Plus, AMD “estimated there was a $45 billion market for its data center artificial intelligence processors this year as it launched a new generation of AI chips. The total addressable market forecast is up from AMD’s $30 billion estimate in June,” as noted by Reuters.
Adding even more fuel to the fire for AMD and NVDA, competitor Taiwan Semiconductor Manufacturing (TSMC) just said it expects revenue growth to be more than double the rate of the broader chip market this year.
The AI boom is just getting underway. Remember, Big Tech has been investing billions of dollars into it. We also know the market is worth billions, if not trillions. In fact, according to Next Move Strategy Consulting, the AI market – currently valued at about $100 billion – could grow twenty-fold by 2030 to more than $2 trillion.
On top of that, generative AI could add between $2.6 trillion and $4.4 trillion a year to the global economy. That’s according to a new McKinsey report, which also said it could have a significant impact across all industry sectors.
