While stocks are rising, this year's FX trends will hold with traders maintaining or adding to big bets like that on EUR/USD or the pound gaining further, or investing in carry trades.
European and Asian shares gained on Thursday after blockbuster results from tech darling Nvidia boosted Wall Street, while a retreat in government bond yields eased pressure on borrowing costs, further boosting sentiment.
Futures tracking the Nasdaq 100 index jumped in the early hours of Thursday after record results from Nvidia, the world's most valuable chipmaker, boosted confidence about the artificial intelligence (AI) boom.
Japan's Nikkei share average rose for a fourth straight session on Thursday, its longest winning streak since mid-June, as U.S. chip designer Nvidia's record earnings lifted Japanese tech shares.
European shares hit one-week highs on Thursday, with chipmakers lifting the technology sector after industry bellwether Nvidia far exceeded expectations with its quarterly revenue forecast, and as easing bond yields also improved risk sentiment.
The optimism around generative
artificial intelligence (AI) has kicked off a rally in several
tech stocks this year, with expectations of billions of dollars worth of opportunities in the years ahead. While
semiconductor giant Nvidia (
NASDAQ:NVDA
) is being viewed as the frontrunner in the AI space due to its advanced graphics processing units (GPUs) that are required to power AI applications like
ChatGPT, several Wall Street analysts are also optimistic about the prospects of chipmaker Advanced Micro Devices (
NASDAQ:AMD
) and see a solid upside potential in the stock.
Analysts Bullish on AMD’s Potential
The robust demand for Nvidia’s AI chips due to the generative AI boom has overshadowed other chipmakers like AMD. Nvidia has an early-mover advantage when it comes to AI chips. On Wednesday, Nvidia not only
exceeded Wall Street’s lofty expectations for the fiscal second quarter with 101% revenue growth but also issued a guidance that suggests 170% year-over-year top-line growth in Q3 FY24.
Meanwhile, AMD’s
Q2 FY23 (ended July 1, 2023) results topped expectations despite an
18% year-over-year decline in revenue to $5.4 billion due to persistent weakness in the PC market. Further, the company’s fiscal third-quarter guidance fell short of expectations. Nonetheless, the company is optimistic about the road ahead and projects a “large ramp” in the Data Center segment's performance in the second half of the year.
During the second quarter, AMD unveiled its new AI chip, the MI300X chip, the production for which is expected to speed up in the fourth quarter. This chip is anticipated to challenge Nvidia’s dominance in the AI market.
Earlier this month,
Citigroup analyst Christopher Danely upgraded AMD to Buy from Hold and increased the price target to $136 from $120. The analyst admitted that he was wrong about two aspects – that AMD’s AI products (MI300) would be margin dilutive and investors would eventually notice the expensive valuation of the stock.
Echoing similar views, Daniel Skelly, a senior investment strategist at Morgan Stanley on August 10, discussed recent changes made by his firm to its U.S. portfolio. Skelly revealed that Morgan Stanley, which has a Buy rating on AMD, increased its position in the stock, as it views the company as a leader in semiconductor end markets with potential tailwinds in AI. He said the stock’s valuation seems reasonable, given its “potential cyclical and secular positioning into 2024+.”
Skelly added that despite worries about cyclical challenges impacting AMD’s core end markets, the company has displayed signs of progress and improved performance.
Like Danely and Skelly,
Raymond James analyst Srini Pajjuri is also optimistic about the stock. He reiterated a Buy rating on the stock with a price target of $145 on August 2. Following the
Q2 earnings call, the analyst noted that AMD’s AI engagements were “tracking well,” given the design wins with Microsoft (
NASDAQ:MSFT
), Meta Platforms (
NASDAQ:META
), and Amazon (
NASDAQ:AMZN
). That said, the analyst thinks it could take time for AMD’s revenue to ramp, as “qualification cycles typically take a few quarters.”
Is AMD a Buy, Sell, or Hold?
Wall Street has a Strong Buy consensus rating on
Advanced Micro Devices stock based on 25 Buys and seven Holds. The average price target of $141.90 implies an upside potential of about 30% from current levels.
AMD shares have advanced 69% year-to-date compared to the 222% rise in
NVDA stock.
Investors should note that
Northland Securities analyst Gus Richard is the most accurate analyst for AMD stock, according to TipRanks. Copying his trades on Advanced Micro Devices and holding each position for one year could result in 85% of your transactions generating a profit, with an average return of about 87.4% per trade.
Conclusion
While the spotlight is on Nvidia currently due to stellar demand for its AI chips, most Wall Street analysts are also positive about AMD’s growth potential in the AI space. Under the leadership of
CEO Lisa Su, AMD has grabbed Intel’s (
NASDAQ:INTC
) market share in the central processing unit (CPU) space over recent years. The company has the financial muscle and technology to compete with Nvidia as well and capture opportunities in the AI market in the years ahead.
Disclosure
The
AI (Artificial Intelligence) boom has propelled Nvidia's (
NASDAQ:NVDA
) stock skyward (see image below). NVIDIA AI has emerged as the operating system for all AI systems. It runs on every cloud and supports all frameworks and models. This implies that Nvidia is poised to deliver massive growth due to the rapid adoption of this next-gen tech, leading its stock to new highs.
Strengthening this view is the company’s solid Q3 outlook. The company delivered
exceptional second-quarter financials and expects revenue of about $16 billion in Q3, representing a year-over-year growth of nearly 170%. Nvidia’s Q3 sales outlook handily surpassed the Street’s expectations of $12.5 billion.
The tremendous demand for its accelerated computing and AI platforms will drive Data Center revenues in Q3 and beyond. NVDA’s HGX platform, known as the engine of generative AI and large language models, is witnessing enormous demand from cloud service providers and large consumer Internet companies. Thanks to the secular tailwinds, the company is well-positioned to deliver record revenues and earnings and enhance shareholders’ returns through share buybacks.
With Nvidia stock riding high on the AI wave,
Mizuho Securities analyst Vijay Rakesh sees significant upside potential from current levels.
Analyst Rakesh Sees Over 25% Upside in NVDA Stock
Rakesh raised Nvidia’s price target following its solid Q2 performance and strong outlook. The analyst increased his price target to $590 from $530, implying an upside potential of over 25% from current levels.
The analyst expects spending on AI to increase by 10 times in the next five years. With its leadership position in the AI space, Nvidia will benefit significantly from higher investments in this space.
He further added that the large addressable market for generative AI could remain a key growth driver for NVDA. With AI spending projected to increase, Rakesh expects Nvidia to “drive 75-90% market share.”
Are Nvidia Shares a Buy?
Nvidia stock has appreciated quite a lot, but it hasn’t peaked. Analysts maintain a bullish outlook on the stock and see further upside potential. With 34 out of 36 analysts covering the stock recommending a Buy, NVDA stock commands a Strong Buy consensus rating on TipRanks.
The average analysts’ price target of $537.38 implies 14.05% upside potential from current levels. Additionally, the highest 12-month price target on NVDA is $800, indicating an impressive 69.79% upside potential. This was given by
Rosenblatt Securities analyst Hans Mosesmann on August 16, 2023.
Investors should note that the average price target is expected to increase as analysts may revise their price targets upward following the company’s massive Q2 beat and solid outlook.
The Final Takeaway
Thanks to the incredible demand for accelerated computing and AI platforms, Nvidia is poised to deliver massive growth, driving its stock higher to new highs. In addition, the company announced an additional $25 billion stock repurchase plan, highlighting its ability to generate significant cash flows and enhance its shareholders’ value.
Disclosure
Asian shares rallied on Thursday after blockbuster results from tech darling Nvidia boosted Wall Street and a retreat in U.S. bond yields eased pressure on borrowing costs globally.
We are back to "bad news is good news" as soft economic data revived hopes central banks could be more or less done raising interest rates, leading investors to rush into risky assets but with wary eyes on the Fed's Jackson Hole symposium.
Japan's Nikkei share average headed for a fourth straight session of gains on Thursday, the longest streak since mid-June, as U.S. chip designer Nvidia's record financial results lifted Japanese tech shares.
Asian shares rallied on Thursday after blockbuster results from tech darling Nvidia boosted Wall Street and a retreat in U.S. bond yields eased pressure on borrowing costs globally.
Nvidia (NASDAQ: NVDA) stock rocketed to over $500 per share after record earnings results tonight, and the numbers are staggering. In the video below, Fool.com contributor and 25-year stock market veteran Eric Cuka breaks down Nvidia stock and provides earnings highlights, price
Nvidia far exceeded expectations with its quarterly revenue forecast on Wednesday as an artificial-intelligence boom fueled demand for its chips and said it would buy back $25 billion in stock, sending its shares soaring after hours.
Shares of Nvidia (NASDAQ: NVDA) are up 8.1% in after-hours trading on Wednesday as of 5:36 p.m. ET following the graphics chip specialist's release of its report for the second quarter of fiscal 2024 (ended July 30).The stock's surge is attributable to the quarter's revenue and e
Well, if you were wondering why you had been hearing so much hoopla about NVIDIA NVDA and its earnings report after the bell this Hump Day — the market had high expectations for the quarter: +8.5% on Monday in anticipation of +300
Nvidia's strong quarterly revenue forecast delivered on Wall Street's high expectations on Wednesday, sparking gains in a range of AI-related stocks and giving a jolt to a stalled U.S. stock market recovery.
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