At the end of 2022, the launch of ChatGP chatbot created by OpenAI has revitalized the artificial intelligence (AI) industry, with many companies beginning to pay attention to the industry.
This enthusiasm has led to a surge in the stock prices of some tech companies, especially Nvidia and Amazon. From October 20th of last year to May 19th of this year, the stock prices of these two companies have risen by 220% and 45%, respectively. Both companies are leading players in the field of artificial intelligence, with Nvidia dominating the chip market and Amazon leading in the software market.
On October 10th, Nvidia announced a 1-for-150 stock split, reducing the entry point for investors and making it an attractive buy. Analysts from Argus Research and Oppenheimer raised their target price to $XNUMX, maintaining a “buy” rating.
On the other hand, Evercore ISI raised their target price from $131 to $145. Nvidia controls about 90% of the market for graphics processing units (GPUs) for artificial intelligence. As the industry evolves over time, the demand for AI chips is expected to increase.
To maintain its competitive edge, Nvidia plans to release new chips annually instead of every two years. The company has $3.9 billion in free cash flow, providing enough resources to maintain its leading position and further invest in its business.
Amazon is currently leading the field of artificial intelligence through Amazon Web Services (AWS), the world’s largest cloud platform, surpassing Microsoft’s Azure and Google Cloud in market share. In the first quarter of 2024, AWS saw revenue growth of nearly 17% year-over-year and operating income growth of 84% year-over-year. Amazon is investing billions of dollars to improve AWS and establish data centers globally.
The company’s free cash flow has grown by over XNUMX% since January of last year, highlighting the company’s financial strength and reliability in the field of artificial intelligence.
Given that the compound annual growth rate of the AI market is expected to grow by at least 37% by 2030, Nvidia and Amazon may continue to represent significant investment prospects even after their recent surges.