Nvidia Stock Hits Record Closing High on Growing Optimism About AI Demand

Key Takeaways

• Nvidia shares climbed to a record closing high Monday in the wake of bullish comments from Wall Street analysts.
• Citi analysts said Nvidia is “still king” when it comes to its client base in the AI accelerator market, and projected the chipmaker’s GPU sales to hyperscalers like Google and Microsoft will double this year.
• The chipmaker's stock price has nearly tripled this year as demand for the company’s AI chips has surged. 
• Nvidia surpassed Microsoft last week as the world's second-largest company by market capitalization and is getting close to passing up Apple for the top spot.

Nvidia (NVDA) shares rose again Monday in the wake of bullish comments from Wall Street analysts.

The stock gained 2.4% to finish at a record closing high of $138.07 and has nearly tripled in value this year, as demand for the company’s chips to support artificial intelligence (AI) has surged. Shares are just shy of their intraday high of $140.76 set in June.

Several stocks with ties to the chipmaker, including partners Arm Holdings (ARM), TSMC (TSM), and Nvidia-backed Soundhound AI (SOUN), gained Monday. The moves helped boost the tech sector, leading the S&P 500 index to a record high.

‘Nvidia Still King’

In a note to clients Sunday, Citi analysts said Nvidia is “still king” when it comes to its client base in the AI accelerator market. They said they expect chipmaker’s GPU sales to hyperscalers like Alphabet's (GOOGL) Google and Microsoft (MSFT) will double this year.

Citi and all but one of the other 22 analysts covering Nvidia tracked by Visible Alpha held a “buy” or equivalent rating on the stock as of Monday, with a consensus price target of $152.41, implying about 10% upside from Monday’s closing price. 

Supply ‘To Remain Tight’

Citi’s comments come after Goldman Sachs analysts said Friday they came away from an investor meeting with Nvidia CEO Jensen Huang “with a better appreciation of the company’s competitive moat,” citing the company’s large customer base, “robust and growing” software offerings, and ability to innovate.

The analysts said orders for Nvidia’s Blackwell chip are booked out with lead times extending up to a year, and that Nvidia “expects supply to remain tight for the foreseeable future.”

Goldman Sachs analysts also maintained a "buy" rating on the stock, and raised their price target to $150 from $135 previously.

Nvidia Nearing Top Spot in Market Cap

A week ago, Nvidia overtook Microsoft as the world's second largest company by market capitalization, behind only Apple (AAPL).

With Monday's gains, Nvidia's market cap is at $3.386 trillion, compared with Apple's $3.516 trillion. Apple, Nvidia and Microsoft are the only three companies with a market cap above $3 trillion.

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