Nvidia (NASDAQ:NVDA) stock is advancing 2.5% in early trading. British bank HSBC recently upgraded the shares and placed a $355 target on NVDA stock. The bank believes that the company’s profits are poised to climb due to strong demand for its chips spurred by the proliferation of artificial intelligence ( ).
HSBC analyst Frank Lee upgraded NVDA stock to “buy” from “reduce.” Furthermore, he increased his price target on NVDA to $355 from $175. Lee wrote that he was surprised by the extent of the firm’s pricing power on its chips that are being used for AI. Specifically, those chips are selling for prices “between 10 and 20 times higher than the average gaming” graphics processing unit, the analyst reported.
The H100 has become a key building block of AI systems that are similar to ChatGPT, CNBC explained.
Another Bank Was Upbeat on NVDA Stock Recently
On April 11, KeyBanc raised its price target on NVDA stock to $320 from $280. Like HSBC, KeyBanc expects Nvidia to benefit from strong demand for its chips from AI developers. KeyBanc reports that OpenAI, the developer of ChatGPT, will use Nvidia’s H100 GPUs to create its upcoming products.
Moreover, KeyBanc expects the increasing demand for Nvidia’s advanced GeForce RTX40 gaming chips to enable its sales to rise going forward. The bank added that it has “an upward bias” to the company’s ability to beat the bank’s second-half financial estimates. The analyst kept an “overweight” rating on NVDA stock.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.