Benzinga - by Chris Katje, Benzinga Staff Writer.
Semiconductor giant NVIDIA Corporation (NASDAQ:NVDA) recently surged past Apple Inc (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) to become the most valuable company in the world.
One analyst sees the trend continuing and predicts Nvidia will become the first company to hit a market capitalization of $4 trillion.
Nvidia's Disruption To AI Sector: Led by "The Godfather" Jensen Huang, Nvidia is now in the lead among the big technology companies competing in a race to $4 trillion, Ives said.
The analyst, who has an Outperform rating on Nvidia and $120 price target, said Nvidia has now vaulted ahead of Microsoft with the AI Revolution now taking center stage. Ives describes the AI Revolution as the "1995 Moment" for the technology sector.
"We believe over the next year the race to $4 trillion market cap in tech will be front and center between Nvidia, Apple, and Microsoft," Ives said.
Ives calls Nvidia's GPU chips as gold or oil for the technology sector with the "fourth Industrial Revolution" currently underway.
"The AI Revolution starts with Nvidia and in our view the AI party is just getting started as its 9 pm in a party going til 4 am with the rest of the tech world now joining. Its all about the pace of data center AI driven spending as the only game in town for GPUs to run Generative AI applications all go through Nvidia."
Related Link: EXCLUSIVE: Nvidia Dow Jones Inclusion ‘A Matter Of When’ — Will It Replace Intel?
Other AI Winners: Ives calls Nvidia and Microsoft as the first derivatives of the AI Revolution, with other derivatives now coming.
The analyst sees Apple as the next key player in the AI Revolution.
"While Apple has been late to the game on AI with the biggest consumer installed base in the world, Cook & Co. have a unique advantage to monetize the AI Party in this 1995 Moment," Ives said of Apple and CEO Tim Cook.
Ives said Apple's AI holy grail is twofold, with a new super cycle for 270 million iPhones getting upgrades and developers likely to build apps on Apple's AI stack.
Ives also has Outperform ratings on Amazon.com Inc (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), MongoDB (NASDAQ:MDB), Meta Platforms (NASDAQ:META), Netflix Inc (NASDAQ:NFLX), and Palantir Technologies (NYSE:PLTR).
Ives said bears continue to "harp on valuations" of pure play AI stocks.
"Transformational tech stories such as Microsoft and Nvidia with the AI Revolution investors must see the forest through the trees to where this spending wave (and estimates) can head over the next 3 years."
The analyst said this tech bull market can continue through 2025 and can broaden out to other areas of the sector including software, consumer tech, cybersecurity and infrastructure.
"This will be a tech market in which the strong will get stronger as AI technology helps Big Tech Stalwarts monetize their massive installed bases across the enterprise and consumer landscape over the coming years."
Here are Ives’ other price targets:
- Amazon: $225
- Alphabet: $205
- MongoDB: $280
- Microsoft: $550
- Netflix: $725
- Palantir: $35
Read Next: Here’s How Much NVIDIA Shares Are Up Since CEO Jensen Huang Got A Tattoo Of The Company Logo
Photo: Shutterstock
Latest Ratings for NVDA
| Mar 2022 | Goldman Sachs | Reinstates | Neutral | |
| Feb 2022 | Summit Insights Group | Downgrades | Buy | Hold |
| Feb 2022 | Mizuho | Maintains | Buy |
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