Key Takeaways
Nvidia Corp. shares surged to a new record, closing at $225.83 after touching an all-time high of $227.84, pushing its market capitalization above $5.5 trillion as Wall Street's AI optimism intensifies.
"The AI trade will stay stronger for longer," Bank of America analysts said, citing a stronger outlook for AI data center growth as they reiterated Nvidia as a top sector pick.
Bank of America boosted its price target on the chipmaker to $320 from $300. Wells Fargo also raised its objective to $315 from $265, pointing to a growing data center opportunity and what it views as a durable growth outlook.
The stock's strength came even as the broader market sold off, showing resilience that investors will watch ahead of the company’s fiscal first-quarter earnings report on May 20.
Nvidia’s record run stood in sharp contrast to the wider market’s performance. The S&P 500 fell 0.88 percent and the Nasdaq Composite dropped 1.52 percent after April’s Consumer Price Index came in hotter than expected at 0.6 percent for the month. The inflation reading, coupled with WTI crude oil pushing back above $101 a barrel, sent a chill through most technology stocks.
The semiconductor sector was broadly lower on the inflation data, with traders taking profits after a strong run. Micron Technology Inc. fell more than 5 percent, and Advanced Micro Devices Inc. dropped about 3 percent. Nvidia’s ability to rally against the sector trend highlights the specific conviction investors have in its AI narrative.
The upgrades from Bank of America and Wells Fargo suggest a potential upside of over 38 percent from current levels. The move reinforces the bullish sentiment around Nvidia's dominance in the AI chip market. Investors will now look to the company's earnings report on May 20 and the subsequent management commentary for confirmation that the growth trajectory remains intact.
This article is for informational purposes only and does not constitute investment advice.
