Software Stocks Plunge Amid AI Bubble Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Source: NASDAQ.COM
- Software Stock Decline: At the start of 2023, the iShares Expanded Tech-Software Sector ETF (IGV) fell 16%, primarily due to investor fears that AI could disrupt the enterprise software market, leading to double-digit declines in stocks of industry leaders like Microsoft, ServiceNow, and SAP, despite their solid earnings reports.
- Surge in AI Investments: OpenAI and Anthropic are raising tens of billions in funding, with Anthropic increasing its target to $20 billion and Amazon negotiating a $50 billion investment in OpenAI, indicating that major tech companies remain optimistic about AI's future, even amid bubble concerns.
- Semiconductor Sector Gains: As software stocks tumble, semiconductor stocks emerge as winners in the AI boom, with funds raised by OpenAI and Anthropic expected to be spent on Nvidia GPUs, further driving growth in the semiconductor industry and highlighting the potential of AI infrastructure development.
- Uncertain Market Outlook: While the software pullback may persist, as long as money continues to flow into OpenAI and Anthropic and their revenues soar, fears of an AI bubble will seem unwarranted, potentially providing new opportunities for investors.
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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: 191.130
Low
200.00
Averages
264.97
High
352.00
Current: 191.130
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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