Just yesterday, news broke that AMD and NVIDIA experienced a strange growth in the stock market, now we know that it is related to Artificial Intelligence (AI). That’s right, without any announcement, AMD experienced a significant rebound in the value of its shares. Specifically, it experienced an increase of 8.31%. On the other hand, NVIDIA also grew but in a smaller proportion, seeing the value of its shares increase by up to 3.06%.
Now, a day later, we know why both companies experienced this sudden growth from nothing. And yes, all of this is linked to the juicy and profitable business of AI acceleration.
AMD and NVIDIA are riding the wave of AI fever
It is indicated that the stock market increase of both AMD and NVIDIA is related to the optimism of investors in the face of prospects for greater demand for chips to accelerate artificial intelligence (AI). With this, Wall Street analysts raised price targets for semiconductor giants. AMD and NVIDIA are among the main players, which is why they experienced the most growth.
NVIDIA is currently the undisputed leader in the high-performance chip market for AI. However, AMD is expected to gain ground this year. NVIDIA can’t cover the entire market, and other companies are opting for AMD’s chips.
“Due to supply constraints, customers often use the entire NVIDIA platform to get priority shipments of accelerators,” Barclays analysts said. They added that 2024 is “the year when AI begins to open up as other chip manufacturers, such as AMD, gain market share.”
While NVIDIA only grew by 3.06%, the shares reached a new all-time high. Each share is worth $563.65. In the case of AMD, they rose by 8.31% to $158.74, reaching their highest level in over two years. It’s also worth noting that NVIDIA took the lead in the entire industry, and it was in 2023 when the value of NVIDIA’s shares tripled.
Both companies are expected to continue breaking records thanks to AI
Barclays raised its price target for AMD shares to $200, while KeyBanc analysts raised theirs to $195. KeyBanc also increased the price target for NVIDIA to $740. In this way, if everything goes as it should, 2024 will make both companies reach records in market capitalization thanks to the value of their shares.
Although sanctions against China have slowed NVIDIA’s growth, it’s important to remember that the leading chip manufacturer is already selling tens of thousands of AI acceleration graphics to India. Just last week, an Indian company ordered NVIDIA AI acceleration graphics worth $500 million. As NVIDIA maintains its supply constraints, other manufacturers like AMD will benefit. That’s why other players, like Intel, also have a hard time making room for themselves among these two companies.
The appearance of AMD and NVIDIA growing in the stock market due to optimism for demand related to Artificial Intelligence first appeared in El Chapuzas Informático.