Even after last year’s impressive performance, many investors expect Nvidia’s momentum to continue in 2024 as long as the company is able to follow through on its promises to investors. “People will be surprised at how long this growth cycle is for Nvidia,” said technology investor Paul Meeks. Demand for artificial intelligence has thrust Nvidia into the spotlight in 2023 as investors poured money into the chipmaker, boosting its shares 239% on bets that its GPUs will power the latest and greatest big-language models. Even with all this attention, Nvidia hasn’t let investors down. At present, the company has exceeded previous estimates on AI tailwinds for several consecutive quarters, displaying sustained demand for its products that shows little sign of abating. The company’s impressive progress has earned the love of Wall Street, with analysts raising their price targets for the stock to account for future growth and naming it among their top AI picks. Wall Street and the investment community seem to agree that Nvidia’s run is a rare event in an industry defined by innovation, likening it to an iPhone moment for the chipmaker. Nvidia’s ‘iPhone Moment’ Few could have predicted the frenzy that ChatGPT would create when it debuted in late 2022, but no company could have been better prepared for the excitement than Nvidia. Karl Freund, an industry analyst for years who briefly worked at Advanced Micro Devices, says the company was positioning itself to benefit from artificial intelligence long before the phrase dominated Wall Street parlance. “The iPhone turned the smartphone market upside down and said, ‘This is the product you should have,’” said Freund, founder and principal analyst at Cambrian AI Research. “This is the only time I’ve seen anything close to this, but even that pales in comparison to what Nvidia has been able to achieve. This is no surprise to them. They’ve been planning this for years.” NVDA 1Y Mountain Nvidia Stock Performance Over the Past Year While innovation may differ from the 2007 iPhone launch that led to smartphone mania, or the rise of the Internet, Kim Forrest, chief investment officer at Bokeh Capital Partners, points out that the hype for artificial intelligence, This is nothing new for an industry defined by the smart new tools that innovators bring to the table. If history is any guide, it may also portend a coming bubble, similar to the one that burst in the early 2000s, which hit unprofitable tech during the dot-com bubble. Meeks, the technology investor, expects a similar phenomenon to occur at some point down the road, poised for a major hit sometime in 2025, with much of 2024 dedicated to continued training of large language models and the introduction of new applications. He added: “This will happen as it always happens.” “A new topic, two powerful forces coming out of it, and a lot of ghosts. I don’t think this will happen in year 24, because there will still be constant excitement about training.” What to Expect in 2024 Many on Wall Street don’t expect the Nvidia hype to die down in the new year. In fact, many investors expect the stock to continue rising as long as the company is able to shatter expectations and point higher. That’s a milestone that many on Wall Street expect the company to achieve, as the consensus price target suggests another 35% upside for shares, according to FactSet. “Their growth rate will slow down, and that will be a signal to start taking some chips off the table, but it looks like there’s still a lot of opportunity, and a lot of competition validating the space,” said Ken of Mahoney Asset Management. Mahoney. With 2024 likely, the main question for investors is what will happen in 2025, according to Freund. This path could depend entirely on updates from the company’s annual GTC conference in March, and the progress competitors can make in reducing the prohibitive costs associated with inference. “That’s the game,” Forrest said. “How do you continue to make better, faster, stronger, but cheaper products?” Several prominent companies have entered the ring in recent months in hopes of offering alternatives and winning over customers. Advanced Micro Devices and Intel both launched their own AI chip rivals in December 2019, while Amazon’s AWS cloud unit announced its own iteration to let customers build and run applications. Emerging alternatives may crowd out the industry and eat away at some of Nvidia’s market share, but don’t expect these companies to overtake their long-standing dominance. The market is large enough and growing, enabling others to break into the niche, Freund says. But no company is capable of dethroning Nvidia. “I can’t think of anything other than the iPhone coming close to comparing to what they’ve been able to do,” Freund said. “The question now is: How long can they keep this up?”