NVIDIA Stock Surges As Demand For AI GPUs Grow, AI Chips Being Sold For Up To 20 Times More Than Gaming GPUs
NVIDIA has seen an impressive surge in its stock after HSBC upgraded the company's position due to the massive demand for its GPUs in AI.
HSBC has upgraded NVIDIA citing its strong position in the AI market and its highly capable line of chips that are accelerating the framework across multiple fields, reports Yahoo Finance. Currently, HSBC has raised the stock prices for NVIDIA (NVDA) from $175 per share to $355 per Share which is a 30% increase compared to what it was being traded at on Tuesday.
In a statement by HSBC's Head of Technology, Frank Lee, it is reported that while NVIDIA's Data Center revenue hasn't seen a significant climb over the last two quarters which can turn into an excess inventory situation, the demand for GPUs within the AI segment can offset the difference.
HSBC Head of Technology Frank Lee wrote in a note that he had concerns over Nvidia's declining data center revenue through the last two quarters as well as itsrising inventories. But he believes the pricing of A.I. chips counteracts those headwinds and changes the revenue model for Nvidia.
"In particular, we’re shocked by Nvidia’s pricing power on AI chips that we see driving earnings upside, higher valuation," Lee wrote.
via Yahoo Finance
Furthermore, the reason why the demand for GPUs in the AI segment can offset the difference is that these chips are being sold 10 to 20 times higher than the traditional gaming GeForce GPUs so the company doesn't have to push for increased sale volumes as each chip makes a huge return, reports HSBC Analysts.
The NVIDIA A100 and H100 accelerators can range in price from anywhere around $10,000 US and up to $40,000 US. Meanwhile, NVIDIA's top gaming GPU, the GeForce RTX 4090, starts at $1599 US and has also
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