Nvidia stock pops amid increasing role in the ‘AI arms race’

Nvidia shares jumped as Bank of America says the company is well-position in the A.I. space.

Video Transcript

SEANA SMITH: It's time for "Triple Play," three stocks that we're watching in the final half hour of trading. We have Nvidia, Comcast, and Under Armour. Kicking it off with Nvidia, Bank of America making the case that the company can lead the, quote, "AI arms race." The firm says that the chipmaker is well positioned to capitalize on growing interest in artificial intelligence and sees it as a catalyst for long-term growth in its very important data center division. The firm raising its price target on the chipmaker to 255 a share, substantially higher from where it is today, about 25 bucks higher there.

Well, taking a look at the fact that it's not exactly going to be a smooth ride here for the company, given the recent gains that we've seen, but Bank of America warning that we could see some pullbacks, but they don't expect any of those downturns to be long-lived. They expect those to be very short-lived and a quick bounce back here. Allie, lots of talk, lots of hype about the AI space. We have heard it on a number of earnings calls this earnings season. Nvidia, at least, the Bank of America's point of view, thinks that they are very, very well positioned in that space.

ALLIE CANAL: Yeah, and AI had already been a heavily invested area, but then certainly with the explosion of ChatGPT, it's just reinvigorated a lot of these conversations and a lot of these stocks. Bank of America also saying in that note that ChatGPT and those other types of services could boost Nvidia's revenue by 25% annually through 2027, since those types of large language programming, they require a lot of computing. Therefore, the demand for chips, that's going to be through the roof. And it's certainly something to watch with this stock, considering shares are up about 60% year to date.