AI Bubble Concerns Rise as Software Stocks Plummet
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Software Stock Plunge: As concerns about an AI bubble rise, software stocks have dropped 16% at the start of the year, with industry leaders like Microsoft, ServiceNow, and SAP experiencing double-digit declines post-earnings, reflecting market fears of AI disrupting enterprise software.
- Investor Confidence Shaken: Despite reporting solid growth, investors are worried that AI could enable customers to build equivalent tools in-house, threatening the market positions of traditional software companies, leading to a sell-off in the software sector.
- Surge in AI Startup Funding: AI startups like OpenAI and Anthropic are attracting massive investments, with Anthropic raising its fundraising target to $20 billion and Amazon negotiating a $50 billion investment in OpenAI, indicating confidence in the AI sector despite bubble fears.
- Semiconductor Sector Benefits: The decline in software stocks is seen as a positive for the semiconductor industry, as the funding raised by OpenAI and Anthropic is expected to be spent on Nvidia GPUs, further driving gains in semiconductor stocks and suggesting that the massive infrastructure buildout will eventually be profitable.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 192.510
Low
200.00
Averages
264.97
High
352.00
Current: 192.510
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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