Nvidia's (NVDA) stock price has been a warpath in the past two years, skyrocketing over 500% within that timeframe with shares hitting an all-time high in the last week alone. Some Wall Street analysts even see Nvidia's market ascending to $10 trillion by 2030.

Bank of America maintains its Buy rating on Nvidia stock while raising its price target on the chip giant to $1,500 per share. Bank of America Senior Semiconductor Analyst Vivek Arya joins Yahoo Finance from the Bank of America Global Technology Conference to talk about his call on Nvidia as the AI chip race from major semiconductor companies broadens out into other industries, such as cloud computing and autos.

"Now we are at the start of what I think could be a decade-long conversion over to accelerated computing," Arya says, explaining the concept of accelerated computing while also adding: "We are just at the start of this cycle. We think that the spending could be anywhere between $250 to 500 billion a year, and Nvidia is leading the charge."

Read up on Nvidia's unveiling of its Rubin AI chip at the Computex 2024 conference in Taipei, Taiwan.

Nvidia is also scheduled to implement a 10-for-1 stock split for current shareholders on June 7, with shares to begin trading publicly at the adjusted price on Monday, June 10.

Catch Yahoo Finance's full interview with Nvidia CEO Jensen Huang.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Luke Carberry Mogan.

Video Transcript

Welcome back to morning brief Brought to you by Invest Go now the battle of the semi conductor space heating up with Intel and video and a MD all announcing new Next Generation A I chips, but we're going to zoom in on invidia.

It's already been a huge year for the stock, obviously shares, though up over 130% so far, just in 2024 surpassing that $1000 milestone for the first time a few weeks ago and just this hitting another record high.

But it hasn't just been this year, right?

NVIDIA's dominance, sending shares skyrocketing over 500% in the last two years.

Take a look at that extreme climb there and not coming as investors double down on a I hype all of NVIDIA's momentum, leading to a lot of bullishness across Wall Street.

Bank of America becoming the latest hiking their price target on NVIDIA this week from 1000 $320 to $1500.

This is now the highest call on Wall Street for the chip giant.

The analyst behind the call, Vivek Arya, is Bank of America's senior semiconductor analyst, and he joins us now.

Vivek, thank you so much for being here with us to talk about your bullish call on NVIDIA.

I'm curious.

Why 1500?

Why not doubling your price target on this name?

Considering the amount of bullishness and the fundamentals that back it up?

Sure.

Good morning.

Thank you for having me.

So I think there are two aspects to it.

The first is where we are in the cycle of converting data centres to accelerated computing.

Right.

The concept of the data centre is not new.

It's been around since the 19 forties, but then we have these multi decade infrastructure upgrade cycles, from the mainframe to the microcomputer to computing.

And now we are at the start of what I think would be a decade long conversion over to accelerated computing.

What is accelerated computing.

It's a way of taking a lot of very intensive data processing tasks that have to do with images with voice, with video, with the processing of these large language models and converting the data centre with new kinds of semiconductors to make sure that processing can be done very efficiently.

We are just at the start of this cycle, We think that the spending could be anywhere between 250 to $500 billion a year, and then video is leading the charge, and I know there is often this comparison to let's compare it to Intel of the past, or let's compare it to Cisco of the past or other parts of the technology of cycles.

But what is different is that NVIDIA is bringing a combination of silicon of systems, of networking, of software of developers, and that is unprecedented.

So to come to your question, you know, technology stocks, the price target really move because of the size of the market because of their execution.

And even at this $1500 the stock would essentially be trading at one time the earnings growth rate.

If you look at the S and P 500 it's trading at two times their earnings growth rate.

So I would claim that even at this kind of, uh, price level, it's actually trading below where the broader market is in terms of the price to earnings to growth ratio.

High target on the street for you, Vivek.

For NVIDIA, what is the significance that you see in deals like the one that is being reported this morning?

Xa I potentially going to be taking the chips that Tesla was supposed to be getting from NVIDIA here?

Yeah, uh, I think there is a race going on between technology companies of various types.

We have seen that, uh, across the cloud of players.

Um, you know who have raised their capital spending forecast to over 40 to 45% growth last year.

We were thinking that growth would be 20%.

It's already 40 to 45%.

There is a race between these different technology companies to be the first to support the next large language model to make sure that they are the destination of choice for a lot of start ups who are trying to really kick start their own generative A i applications.

And then this market is broadening from these cloud service provider to a lot of enterprise verticals.

And in this most recent quarter and video did call out that automotive and automotive customers, which I assume includes Tesla, are part of that really large, you know, vertical.

So we see this spreading from cloud customers towards automotive towards health care.

A lot of drug discovery is being done with this infrastructure.

Financial services are benefiting from it.

And then the last but not least part that we will start to see more is the rise of this infrastructure among sovereigns.

Right?

So we have seen India, Europe, Japan, every country and region, the Middle East.

They are trying to make sure that they are able to use their culture, their language, to really go and train these large language models.

And we think we are just at the start of what that and that could be a really large infrastructure operate cycle as well.