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Nvidia Stock Jumps After Analyst Says It Will Add $40 Billion in Value Over the Next Year

Sep 15, 2017

Shares of semiconductor and chip-maker Nvidia jumped 6% in trading Friday after an analyst said investors were underestimating the company's artificial intelligence capabilities.

On Friday, Evercore ISI analyst CJ Muse issued on of Wall Street's most bullish calls on what is already one of the most popular stocks this year.

The firm hiked its 12 month price target on the stock to $250 from $180. At that price, Nvidia would command a market capitalization $142.3 billion — about $40.5 billion above the company's current valuation.

"We are only at the cusp of AI’s growth potential and Nvidia is creating THE AI computing industry standard," the analyst wrote, saying that their firm had met with Nvidia's CEO and CFO over the past few days.

"Supported by first mover advantage, its unified graphics processing unit architecture and a system level approach (including an extensive CUDA[computing software] software ecosystem supported by $10 billion plus in historical research and development dollars), Nvidia has created an industry standard for AI systems that will be nearly impossible to replicate."

The analyst noted that in the long-term, those graphics processing units — which are the most advanced in the world — can also be used in artificial intelligence such as deep learning and autonomous driving.

Nvidia's stock has also in recent months been getting a boost from interest in cryptocurrency bitcoin and blockchain. The company's graphics card are used to mine bitcoin.

Shares of competitor AMD meanwhile have risen 2%.

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