It’s a good time to be stocking up on Nvidia chipsets (Nasdaq: NVDA), or at least one of its investors. A new market plan has just been announced, and investors are excited about the idea, sending shares up nearly 6% in the closing minutes of the Monday afternoon trading session.
While much of Nvidia’s plans to get the Chinese market going again have been achieved, another has been more quietly ramped up: the domestic market. Nvidia is quickly working on a new line of chips geared toward the average consumer end user, allowing artificial intelligence (AI) to be brought directly into the home. Whether it’s playing games, changing backgrounds for video calls, or even creating your own images, the new line of chips will help make it happen. The idea of AI being used on a large scale is both exhilarating and terrifying, promising to destabilize a wide range of markets in the process.
Speaking of the Chinese market…
While Nvidia’s quest to bring AI to the home user is a big deal, there’s another big deal on hand that’s a lot less delicious. Specifically, it’s the Chinese market. We know that Nvidia has been frantically trying to produce a batch of chips that are diluted enough to allow exports over the objections of US regulators. But now, reports indicate that the Chinese market doesn’t actually want these chips. All of Alibaba (Nasdaq: Alibaba) and ByteDance have made clear they don’t want Nvidia’s struggling chips. As it turns out, without this huge gap in performance, home brew chips seem like a better alternative since costs are lower and the chips are mostly on par with new releases. This will do terrible things to Nvidia’s bottom line, absent a significant new market to make up for the shortfall.
What is the target price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 32 buys and four holds set in the past three months, as shown in the chart below. With its stock price up 232.46% over the past year, analysts currently have an average price target for NVDA. $662 per share indicates an upside potential of 26.88%.
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