Chip manufacturer NVIDIA (NVDA) recently introduced its eighth-generation AI software, the TensorRT 8, which can reduce inference time for language queries by half. This will enable the development and delivery of high-performance search engines, ad recommendations and chatbots from the cloud to the edge.
The TensorRT 8 bridges an important operational gap. Earlier, companies would significantly reduce the size of transformer-based models to develop search engines. This resulted in less accurate search results. Meanwhile, the TensorRT 8 creates far more accuracy in language applications.
NVIDIA’s GPUs (graphic processing units) are quickly gaining traction from the proliferation of AI. The company has partnered with top cloud server providers such as Amazon (AMZN), Baidu (BIDU) and Facebook (FB), which are leveraging AI in various applications. Furthermore, partnerships with the likes of IBM (IBM), Microsoft (MSFT) and SAP (SAP) have successfully brought AI to the enterprise users’ table. (See NVIDIA stock chart on TipRanks)
Greg Estes, vice president of developer programs, NVIDIA, said, “AI models are growing exponentially more complex, and worldwide demand is surging for real-time applications that use AI. That makes it imperative for enterprises to deploy state-of-the-art inferencing solutions.”
He added, “The latest version of TensorRT introduces new capabilities that enable companies to deliver conversational AI applications to their customers with a level of quality and responsiveness that was never before possible.”
On July 15, Mizuho Securities analyst Vijay Rakesh maintained a Buy rating, and increased the price target to $900 from $710 on the stock, implying a 383.6% upside potential from current levels.
Rakesh raised estimates for NVIDIA’s upcoming second-quarter results, encouraged by the belief that Nvidia continues to dominate the promising space of accelerated artificial intelligence compute.
Consensus among analysts is a Strong Buy based on 26 Buys and 1 Hold. The average Nvidia price target of $808.25 implies 334.3% upside potential to current levels.
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Yesterday, Nvidia Corporation (NVDA) started trading on a four-for-one split-adjusted basis, announced in May 2021. The Board approved the stock split to make the shares more accessible to investors and employees. Shares closed down 1% at $186.12 on July 20.
Nvidia designs and manufactures GPUs, chipsets, and related multimedia software. The company has reshaped many industries, including transportation, healthcare, and manufacturing, with its accelerated computing and AI technology. Shares have gained nearly 79% over the past year. (See Nvidia stock charts on TipRanks)
The global chip shortage and related supply constraints have led to huge pent-up demand, and NVDA has cautioned about a difficult second half of the year.
Nvidia’s processors are used for both gaming and cryptocurrency mining. To avoid the hoarding of its processors for mining and the resultant shortage of gaming supplies, Nvidia reduced the mining efficiency of its new RTX gaming GPUs and launched a dedicated GPU for professional miners called CMP (cryptocurrency mining processor).
Furthermore, Nvidia is yet to complete the acquisition of Arm Holdings for $40 billion, announced in September 2020. The company has drawn a lot of criticism related to the buyout due to ongoing antitrust probes and opposition from rivals which is stalling the process.
Nvidia is scheduled to report its second-quarter earnings on August 18.
Overall, the stock commands a Strong Buy consensus rating based on 26 Buys and 1 Hold. The average Nvidia price target of $198.12 (split-adjusted) implies 6.5% upside potential to current levels.
Also, TipRanks data shows that financial blogger opinions are 92% Bullish on NVDA, compared to a sector average of 70%.
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