Nvidia, Partner Stocks Climb on New AI Platform as Analysts Say AI Peak Is Yet To Come

Nvidia (NVDA) shares were up over 3% in intraday trading Monday after the chipmaker announced its next-generation artificial intelligence (AI) chip and the company said it will unveil a new family of semiconductors annually, leading Bank of America to lift its price target for the stock.

The chipmaker’s shares were 3.2% higher at $1,131.70 as of 12:30 p.m. ET Monday, contributing to the stock more than doubling since the start of the year. Shares of some of Nvidia’s partners including Micron Technology (MU), TSMC (TSM), and Arm (ARM) also gained.

Nvidia’s New Rubin Platform Coming in 2026

Nvidia CEO Jensen Huang said the chipmaker will release a new next-generation system, the Rubin platform, in 2026, as part of Nvidia’s one-year rhythm to keep up with the rapid evolution of AI tech. The new platform will include new graphics processing units (GPUs), Arm-based central processing units (CPUs), and networking chips.

The Rubin platform will succeed Blackwell, unveiled in March, and will be available through Nvidia partners later this year. Analysts have said they believe that Blackwell is likely already sold out into 2025 amid soaring AI demand.

BofA Lifts Nvidia Price Target, Citing ‘Stronger Growth Opportunities Ahead’

Following the Rubin platform announcement, Bank of America analysts raised their target for Nvidia’s stock price to $1,500 from $1,320, citing “stronger growth opportunities ahead as gaming cycle troughs and data center demand potentially faces strong, long-term demand dynamics.”

The analysts wrote they are “bullish on semis” broadly with “AI tailwinds,” and suggested the industry’s AI development is still in its early stages with its peak yet to come, as “many top tech/cloud companies are either well behind or still in experimentation stages of training their large language models.”

The analysts noted that based on cloud hyper scalers spending plans and other industry indicators, they expect that “converting global data centers to accelerated computing could require $250-$500bn annually and we are only 20-30% into that process that could last another 3-5 years,” with Nvidia making the leading AI chips.

“Chip upgrades (processors, memory) in smartphones/PC, spurred by competition between consumer hardware could jump-start in 2H24,” Bank of America analysts said, adding that they expect Arm and Micron to be among the top beneficiaries of “spec upgrades across consumer devices.”

AMD Also Aiming for Annual Cycle

Advanced Micro Devices (AMD) also provided more details about its AI chip plans, sending shares higher before they turned lower later in the session.

AMD CEO Lisa Su announced the next generation family of chips, called MI350, that AMD expects to reach customers by 2025. The MI350 will feature a new chip architecture. The chipmaker’s latest AI processor, MI325X accelerator, is set to deliver in the fourth quarter of 2024.

Like Nvidia, AMD reported the company is aiming for an annual product release cycle.

AMD shares were 3.2% lower at $161.59 as of 12:30 p.m. ET Monday after giving up earlier gains. They’ve climbed close to 10% since the start of the year.