Citi this morning increased its price target on Nvidia (NASDAQ:NVDA) stock to $150 from $126. Citi also kept a “buy” rating on NVDA. The bank believes that the chipmaker will benefit from strong demand from companies and government agencies for artificial intelligence (AI) “agents.”
What Are AI Agents?
AI agents are AI-powered assistants that carry out certain tasks. Eventually, the revenue from the chips that power these tools will account for nearly 50% of the sales of Nvidia’s data-center unit, Citi believes.
These assistants acquire knowledge from the data they analyze and make their own decisions. They can also take actions independently. According to Citi, the agents aren’t yet totally reliable, but they can already perform some tasks better than humans.
Nvidia’s “Retrieval-Augmented Generation” platform could constitute the core of these agents. Citi believes that AI adoption is only about a third of the way to completion.
Startups Are Aiming to Take Market Share From Nvidia
Barron’s is noting today that multiple startups are looking to move in on Nvidia’s turf. Etched, which raised $120 million, has created chips that it says are “faster and cheaper” than Nvidia’s upcoming Blackwell offerings. PayPal (NASDAQ:PYPL) co-founder Peter Thiel has invested in the firm.
And poised to soon be valued at $2.5 billion, Groq’s chips power AI inference. According to the startup, its chips are superior to those of Nvidia when it comes to enabling AI language applications.
Meanwhile, Barron’s also warned that Nvidia’s shares could “easily” drop to $102.29, which represents its 50-day moving average.
The Price Action of NVDA Stock
Heading into today, the shares had dropped 7% in the last five days, but they were still up 10% in the preceding month and 40% in the last three months.
On the date of publication, Larry Ramer did not hold (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.
