OpenAI released ChatGPT, a conversational intelligence app, in November 2022. Since then, AI has become a hot investment theme on Wall Street, with Super Micro Computer (SMCI -1.54%) and Nvidia (NVDA -2.75%) being top performers in the S&P 500 (^GSPC -0.45%).
Supermicro and Nvidia have seen their shares rise significantly due to increased demand for AI infrastructure. They recently completed stock splits to manage their rising share prices.
Investors believe that investments in supercomputing chips and servers will continue to drive shares of Supermicro and Nvidia higher in the next year. The Wall Street Journal provides these price targets:
- Supermicro: Average price target of $67.50 per share, a 41% upside from the current price of $48.
- Nvidia: Average price target of $150 per share, a 7% upside from the current price of $140.
Here’s what investors should know about Supermicro and Nvidia:
1. Super Micro Computer
Super Micro Computer makes high-performance computing platforms optimized for AI. The company’s quick time-to-market and diverse product selection have positioned it as a leader in the AI server industry, expected to grow at 30% annually.
Supermicro reported mixed results in the last quarter but is expected to see earnings increase by 54% over the next year. However, regulatory issues could make the stock volatile in the coming months.
2. Nvidia
Nvidia is a key player in the AI revolution, with GPUs powering advanced AI systems. It has a dominant market share in AI accelerators and a robust ecosystem of software tools. With an expanding portfolio and a strong position in the AI economy, Nvidia is expected to see its adjusted earnings increase by 54% in the next year.
While Nvidia’s stock is not cheap, patient investors may consider buying a small position in the company due to its growth potential in the AI market.
