Corporations are increasingly allocating more of their technology budgets to AI-related projects, and Nvidia is poised to reap the benefits, according to a recent enterprise spending report by Piper Sandler.
The investment bank’s survey of chief information officers revealed a significant uptick in AI spending intentions. In fact, the survey results showed that 73% of technology buyers are planning, testing, or implementing generative AI next year. This reflects a doubling of enterprise AI spending intentions from the previous year.
With 62% of respondents indicating plans to increase spending on AI technology, it is clear that AI has become the top category for investment. This percentage has risen significantly from 31% reported one year ago.
Analyst Harsh Kumar from Piper Semiconductor believes these survey results are highly favorable for Nvidia. As a result, he has reiterated his Overweight rating on the chip maker and set a $620 price target for its shares. Kumar predicts that the market for GPUs used in AI applications could surpass $400 billion by 2027, which positions Nvidia as the clear leader in the space.
Nvidia’s dominance in the market is attributed to its robust software programming ecosystem, CUDA, which is preferred by start-ups and corporations alike for its reliability and efficiency.
While Nvidia shares experienced a 2.5% decline on Monday, falling to $460.04, the long-term outlook remains optimistic for the company.
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