Bank of America analysts have increased their price target for Nvidia stock to $190 per share this week. They anticipate significant growth in the AI market, expecting it to reach $400 billion, which they believe provides Nvidia with a "generational opportunity. " The analysts highlight Nvidia's clear competitive advantage, bolstered by its robust enterprise partnerships. Nvidia stock has experienced impressive gains throughout the year, and Bank of America's analysts suggest that additional increases are likely. In a note published Thursday, they adjusted their price target for the stock from $165 to $190, indicating a potential upside of 38% based on its midday trading price of approximately $138 on Friday. They predict exponential growth in the AI sector over the next few years, which will offer Nvidia substantial opportunities as it maintains its leading position in the industry. The analysts project that the AI accelerator market will expand to $280 billion by 2027, eventually reaching upwards of $400 billion from its current valuation of about $45 billion in 2023. With the rapid emergence of AI models—thanks to developers like OpenAI, Google, and Meta releasing new large language models several times yearly—the demand for computing power is expected to increase significantly, according to the analysts. They note that each major generation of language models, particularly those developed for larger scales and improved reasoning, will necessitate more intensive training requirements. "We are observing an accelerating pace in the development of new models, especially large language models, which are being designed for larger sizes and enhanced reasoning capabilities that both demand increased training intensity, " the analysts stated. Additionally, they emphasize Nvidia's strong partnerships with enterprise clients such as Accenture, ServiceNow, and Oracle, which highlight the rising use of AI in large corporations and establish Nvidia as a preferred partner. "Nvidia's collaborations span various sectors (e. g. , Accenture, ServiceNow, Microsoft), and initiatives like AI Foundry and AI Hubs play crucial roles in its AI leadership, addressing both hardware and systems/ecosystem needs, " the analysts remarked. Finally, the analysts noted that Nvidia's financial outlook is favorable for future growth, citing its impressive free cash flow generation with margins of 45%-50%, nearly double that of other "Magnificent 7" stocks.

They project that Nvidia will achieve $200 billion in free cash flow over the next two years.