Key Takeaways
- Bank of America has increased its stock price targets for both NVIDIA and AMD, signaling strong confidence in the chipmakers.
- The boost comes as NVIDIA and AMD secure significant deals for “sovereign artificial intelligence” projects, particularly with Saudi Arabia.
- These new AI ventures are seen as a major growth area and could help lessen the impact of future export restrictions to China.
- Both companies received continued “Buy” ratings from the bank, underscoring a positive outlook for AI demand.
Good news for NVIDIA and AMD supporters. Bank of America recently bumped up its stock price targets for both tech giants. NVIDIA’s target rose to $160 from $150, while AMD’s climbed to $130 from $120 per share.
The main reason for this optimism? Both companies are making impressive strides in what’s known as sovereign artificial intelligence. These are large-scale AI projects developed by nations to serve their specific needs.
NVIDIA and AMD have announced separate multi-year AI infrastructure partnerships with HUMAIN, a company under Saudi Arabia’s Public Investment Fund. Bank of America estimates these projects could be worth a hefty $3 to $5 billion each year, or $15 to $20 billion over several years, according to Investing.com.
The bank sees sovereign AI becoming a massive opportunity, potentially a $50 billion-plus annual market. This would represent about 10% to 15% of the total global AI infrastructure market. Bank of America highlighted that this type of AI complements existing commercial cloud services by focusing on training AI models tailored to local cultures, languages, and specific requirements.
These national AI initiatives could also help navigate challenges like limited power for data centers in the U.S. and ongoing trade restrictions with China, especially those expected to begin in 2026.
NVIDIA is anticipated to secure around $7 billion in direct contracts from these ventures. The first phase alone is set to include 18,000 of its advanced Blackwell GPUs, valued at approximately $700 million. Over the next five years, Bank of America expects NVIDIA to deliver “several hundred thousand” of its top-tier GPUs.
AMD’s slice of the pie, potentially reaching $10 billion, is likely to kick off a bit later, around 2026. Their contribution will span CPUs, GPUs, networking components, and their open-source software stack known as ROCm. While AMD’s project might involve a joint venture with Cisco, Bank of America noted this marks a significant step for AMD, placing it on a “similar footing as NVIDIA” for large-scale projects.
Reflecting this positive outlook, Bank of America reiterated its “Buy” ratings for both NVIDIA and AMD. The bank cited stronger long-term demand for AI and memorably described GPUs as “the new coin of the realm,” emphasizing their critical role in the evolving tech landscape.
