What happened
Shares of Nvidia (NVDA 0.03%) surged higher Thursday, jumping as much as 5.5%. As of 3:30 p.m. ET, the stock was still up 5%.
While general enthusiasm regarding tech stocks helped drive the stock higher, the primary catalysts that sent the semiconductor specialist higher were a major product release and a couple of bullish pronouncements by Wall Street analysts.
So what
Nvidia announced today the debut of its GeForce RTX 4060 family of graphics processing units (GPUs). The company said, "Superpowered by AI, [its] newest GPUs provide 2x the horsepower of the latest gaming consoles." The chips are built on Nvidia's Ada Lovelace architecture and boast Deep Learning Super Sampling (DLSS) 3, which reduces the performance limitations inherent in CPUs. The graphics cards also feature third-generation ray-tracing technologies, starting at just $299.
On the heels of Nvidia's announcement, the stock received two price target boosts from Wall Street.
First out of the box was Credit Suisse, which increased the firm's price target to $350 from $300, while maintaining an outperform (buy) rating on the shares. That represents gains for investors of roughly 16% compared to Wednesday's closing price. The investment bank believes consensus estimates are too low, particularly in light of the surge in interest for artificial intelligence (AI). Cloud providers are scaling their AI and machine learning offerings for fear of missing out on "AIs iPhone moment." Nvidia provides the full stack -- or combined hardware and software solutions -- that form the foundation for widespread AI adoption.
Oppenheimer analyst Rick Schafer is equally enthusiastic, also raising his price on the stock to $350 from $300, while maintaining an outperform rating. The analyst also cited the accelerating opportunity presented by AI.
Now what
Nvidia's stock was hit hard by the downturn and the faltering sales from the company's gaming segment. However, investors have warmed to the vast potential for widespread adoption of AI, causing the stock to double so far this year.
In February, CEO Jensen Huang noted, "Gaming is recovering from the post-pandemic downturn, with gamers enthusiastically embracing the new Ada architecture GPUs with AI neural rendering."
This suggests it won't be long before Nvidia is firing on all cylinders, which could drive its stock to new heights.
