At the end of 2022, the launch of the ChatGP chatbot created by OpenAI has revitalized the artificial intelligence (AI) industry, with many companies now turning their attention to this sector.
This enthusiasm has led to a surge in the stock prices of some tech companies, notably Nvidia and Amazon, with both companies seeing their stock prices rise by 220% and 45%, respectively, from October 1st of last year to May 19th. Both companies hold leading positions in the field of artificial intelligence, with Nvidia leading in the chip market and Amazon leading in the software market.
On October 10th, Nvidia announced a 1-for-150 stock split, lowering the entry point for investors and making it an attractive buy. Analysts from Argus Research and Oppenheimer raised their target price to $XNUMX, maintaining a “buy” rating.
On the other hand, Evercore ISI raised its target price from $131 to $145. Nvidia controls about 90% of the market for artificial intelligence graphics processing units (GPUs). As industry demand for AI chips is expected to increase over time with industry development.
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In order to maintain its competitive edge, Nvidia plans to release new chips annually instead of every two years. The company has $3.9 billion in free cash flow, providing enough resources to maintain its leading position and further invest in its business.
Amazon is currently leading the artificial intelligence field through Amazon Web Services (AWS), the world’s largest cloud platform, ahead of Microsoft’s Azure and Google Cloud in market share. In the first quarter of 2024, AWS saw revenue growth of nearly 17% from the previous year, with operating income increasing by 84% year-over-year. Amazon is investing billions of dollars to improve AWS and establish data centers globally.
The company’s free cash flow has grown by over 1,000% since last year, highlighting the company’s financial strength and reliability in the field of artificial intelligence.
Given that the compound annual growth rate of the artificial intelligence market is expected to grow by at least 37% annually through 2030, Nvidia and Amazon may continue to represent significant investment prospects even after their recent surges.
