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Does Nvidia have pricing power over AI?

Nvidia It’s one of the leading chip manufacturers on the market and have one close relationship in terms of AI or artificial intelligence. Given this scenario, there HSBC have pointed out that the signature has pricing power over the industry and raised theirs Rating to buy from reduce with a $355 target price of $175 earlier acc Josh Schafer on Yahoo Finance.

The company’s new price target reflects a increase of about 30% from when the shares traded on Tuesday.

He Frank Lee, Chief Technology Officer of HSBCHe wrote that in a note concerned about falling data center revenues from Nvidia in the last two quarters as well as the Increase your inventories. But he thinks so Chip pricing for AI counteracts this headwind and changes the revenue model by NVIDIA.

“In particular, we are surprised by Nvidia’s pricing power in AI chips, which we believe is driving gains and higher valuation,” Lee wrote.

That shows the analysis of HSBC AI chips sell for 10 to 20 times more than standard gaming chipswhich means that Nvidia You don’t need to increase sales volume to previously expected levels. The company sees Nvidia dominant generative AI with a 90% market share in fiscal year 2024far ahead of the usual competitors such as Advanced Micro D, intel And Micron technology.

“While the overall addressable generative AI market remains difficult to forecast, Nvidia has the higher potential leverage from a hardware perspective,” Lee added.

Other companies benefited from AI

Since the start of Beta version of ChatGPT At the end of November, investors Companies rewarded for joining the AI ​​train.

The actions ofMicrosoft They have increased by more than 26% since rumors about a Investment in ChatGPT on January 10th. The software giant said two weeks later it would make one Multi-year, multi-million dollar investment in OpenAIthe company behind the much-discussed AI-powered chatbot.

The actions ofalphabeta almost matched Microsoft’s profit Earlier in the year, however, they stumbled upon the news of the Failed to start search with AI and Samsung may buy a new search engine.

The same narrative has played out in the energy sector. online educationat which the actions of chegg dropped 44% in about five months fear that ChatGPT could steal market share along with a weaker-than-expected full-year earnings forecast. However, a new partnership with OpenAI has pushed shares up 10% over the past week.

NVIDIA used Microsoft’s Playbook and positioned itself as such leading in the field of AI space in all public forums. The company In his last quarterly earnings presentation, he mentioned AI more than 70 times.

The Nvidia shares have also followed the AI ​​hype playbookto fire about 85% this year. The increase is more than double the shares of chip competitor AMD. Meanwhile the Intel shares have barely outperformed the Nasdaq Composite.

Nvidiait closed at $277.13 on Tuesday, leaving a bullish gap at the start of the week and the 70 and 200 period moving averages remain below the price. Meanwhile, the egg indicators are mostly bullish.

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