Most of us likely remember the chip shortage that ran through a good chunk of the early 2020s. While a lot of that has turned around since then, there are some potential trouble spots. And some companies are thinking forward about their chip supply. One of these is chip stock Nvidia (NASDAQ:NVDA), which took steps to avoid any future chip troubles by setting up a new partnership of sorts. Investors were reasonably happy with the arrangement, sending shares up fractionally in Thursday afternoon’s trading.
Nvidia’s CEO, Jensen Huang, turned to C.C. Wang, the CEO of Taiwan Semiconductor (NYSE:TSM), to discuss the supply issues seen in the chips that power artificial intelligence. While the bad old days of the chip shortage haven’t come back, there were some signs that supply could be a problem, particularly in this vertical. While we don’t know much about what came out of that meeting, it’s a safe bet the two were looking to set up new supply lines.
What We Do Know about the Meeting
However, some news did slip out about the meeting that illustrates what’s going on in the sector. Huang expects 2024 to be a “huge year” for AI, and that means a likely rise in demand for those chips that run AI operations. Though Huang kept quiet about the impact of China on Nvidia, he has warned in the past that cutting off the Chinese market might ultimately do more harm than good to United States tech firms.
Is Nvidia a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 34 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 211.46% rally in its share price over the past year, the average NVDA price target of $675.40 per share implies 9.77% upside potential.
