Should I buy Nvidia shares? It is a “generational opportunity”

At one point this year, the stock accounted for more than a third of the S&P 500's gains, and some investors even threw parties to watch Nvidia's earnings release.

Nvidia's astronomical rise to a $3 trillion company also caused division, with many on Wall Street doubting the stock can see further gains, while others believe the AI ​​boom offers even more upside.

This leads investors to ask themselves, “Should I buy or sell Nvidia shares now?”

Bank of America analysts have an answer: In a note on Thursday, they reiterated their Buy rating on Nvidia shares and increased their price target from $165 to $190, meaning the price is up from Friday's closing price could rise 38% higher.

At $190 per share, Nvidia's market capitalization would also explode from $3.4 trillion today to $4.7 trillion.

In fact, BofA is so bullish on Nvidia stock that analysts are calling it a “generational opportunity” and valuing the total addressable market for AI accelerators at more than $400 billion.

“The demand for AI models continues to evolve, with the frequency of new LLM model launches now increased to 3-5 times/year per developer (OpenAI, Google, Meta, etc.) and each new major generation 10-20 times Computing power requires training,” analysts said.

Their confidence in Nvidia has been boosted by other companies in the chip sector such as Taiwan Semiconductor and ASML, both of which recently signaled strong AI demand. BofA meetings with Broadcom and Micron executives, as well as comments from AMD, have provided similar evidence.

Meanwhile, Nvidia CEO Jensen Huang also announced high demand for the company's next-generation AI chip.

“Blackwell is in full production, Blackwell is running as planned and demand for Blackwell is insane,” he told CNBC earlier this month. “Everyone wants to have the most and everyone wants to be first.”

Adding to BofA's bullish case for Nvidia are its underrated corporate partnerships with companies like Accenture, ServiceNow, Microsoft and others, as well as its software products, which are helping to bolster Nvidia's dominance in the hardware space. Together they form a deeper overall Nvidia AI ecosystem.

In addition, Nvidia could generate more than $200 billion in free cash flow over the next two years, even competing with Apple, BofA estimates.

Earnings reports later this month from tech giants developing AI technologies, such as Microsoft, Google and Amazon, are likely to provide further insight into demand. And Nvidia is expected to report on November 20th.

While some on Wall Street have expressed skepticism about whether massive investments in AI will impact the bottom line, the tech sector is in a cutthroat race to be first on the scene with the latest advances in AI.

“We continue to see the pace of new model development increase,” BofA said. “LLMs in particular are designed for both greater size and better thinking skills, both of which require higher training intensity.”