What happened
Shares of Nvidia (NASDAQ: NVDA) rose on Wednesday, as investors applauded the chipmaker's recent moves to bolster its position in the booming artificial intelligence (AI) market. By the close of trading, Nvidia's stock price was up more than 1% after rising over 5% earlier in the day.
So what
Nvidia proved that innovation is alive and well at the semiconductor titan's developer conference on Tuesday. Nvidia showed off a new AI supercomputing service, high-performance processors, and computing infrastructure designed to help train AI models, among a host of other announcements. These products and services are intended to help Nvidia bring the power of AI to every industry, according to CEO Jensen Huang.
Nvidia also struck a blockbuster partnership with cloud computing leader Amazon (NASDAQ: AMZN). The two companies will work together to build highly scalable, cloud-based tools that are expected to drive down the cost of AI model training by as much as 40%. Nvidia now has deals with the top three public cloud providers, including Microsoft and Alphabet.
Now what
Wall Street cheered Nvidia's announcements, and multiple analysts hiked their price targets for its stock.
Bank of America analyst Vivek Arya, for one, boosted his share price forecast from $275 to $310. Arya noted that Nvidia's new AI products and services will help to expand its already sizable market opportunity.
Moreover, he believes the chip giant's partnerships with Amazon and other cloud services providers could help it "reshape the existing tech industry." In turn, Arya named Nvidia his "top compute pick" for the coming year.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Joe Tenebruso has the following options: long January 2025 $100 calls on Amazon.com. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Bank of America, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
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