Aurora Innovation's share price surged more than 50% following news it had partnered with NVIDIA . While there are hurdles to overcome, the share price can easily rise another 100% or more this year because the stock is deeply undervalued. The deal with NVIDIA is part of NVIDIA’s push into a broader range of end markets centered on its AI technology. NVIDIA is out to disrupt the autonomous driving industry, and Aurora is a critical piece of the puzzle. NVIDIA provides the hardware and software to operate Aurora’s Driver platform, while Continental will put the components into a marketable package. The target market is big trucks, which will undoubtedly include other vehicle types over time.
Unlike other technological advances, this one is slated to enter production this year. The plan is for an initial market launch in May, with mass production beginning in 2027. The deal is to produce and deploy products at scale, capturing a large portion of the global AV market. The takeaway for Aurora investors is that this deal validates the business while rapidly accelerating the revenue and profitability outlook. As it is, the ten analysts tracked by MarketBeat are forecasting quadruple-digit hypergrowth in 2025, triple-digit growth in the next four to five years, and solid, high-double-digit growth for several years beyond that. Regarding the valuation, the company’s P/E in this scenario is roughly 12x in 2030, a deep value for a rapidly growing tech company.
Insider, Institutional, and Analyst Trends Are Bullish for Aurora Stock
The analysts’ trends favor higher stock prices for Aurora Innovation. The trends in 2024 and the first weeks of 2025 include increasing coverage and price targets, with the consensus rating pegged at Hold and the consensus up more than 40% in 12 months and nearly 25% from December 2024 to January 2025. The consensus lags the price action in January. Still, the freshest targets, including one issued following the NVIDIA announcement, put this stock at $10 to align with a critical resistance target, the price at which the stock traded when the SPAC merger closed in 2021.
Insider and institutional ownership for this company is robust and aiding the updraft in share prices. Insiders have sold over the last year, with nearly 100% of sales by investor Reed Hoffman. Hoffman is notable for his role in co-founding LinkedIn and as an early investor. Even so, insiders own about 15% of the stock, including a still-sizeable portion by Hoffman. On the other hand, institutions have been buying this stock on balance quarterly for six consecutive quarters and now hold about 45% of the shares. Institutional buying is broad-based and includes leading firms like JPMorgan Chase, Franklin Resources, and State Street, alongside public and private investment capital and boutique money managers.
Aurora Has the Capital to Reach Profitability
Aurora diluted its share value by 15% in F2024, and there is a risk of additional dilution, but it is mitigated for now. The company raised nearly $0.5 billion in funds, bringing the cash, equivalents, and long-term investments to over $1.35 billion. That leaves the company in a net cash position relative to total liability, with cash and investments sufficient to cover nearly 10 quarters of operations at the Q3 burn rate; the company will be profitable before then. Liability is about 0.18x cash and investment and 0.1x assets.
The Technical Outlook: Aurora’s Stock Market Comes to a Boil
The market for Aurora’s stock has been simmering for months, with volume rising and pushing the price action higher. The stock price shows a clear bottom at the $1.50 level, breaking above a trigger point in late 2024. The trigger point is the baseline/neckline for the reversal pattern, and it has been confirmed as support. The 2025 price surge confirms support at this level and points to higher prices over time. With this in play, the market will likely reach the $10 level to retest the critical resistance target again soon. Assuming the market can move above it, a move up to the mid-to-high teens is likely. At that price point, this stock will trade at a valuation better aligned with the growth outlook.
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Dj Ibd: As Nvidia Clings To Support, This Ibd 50 Stock Eyes An Ai-Fueled Breakout
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Market Chatter: D-Wave Quantum CEO Says Nvidia's Huang Wrong About Quantum Computers
D-Wave Quantum Chief Executive Alan Baratz said Wednesday that Nvidia CEO Jensen Huang is "dead wrong" about how long it will take before quantum computers are commercially viable, CNBC reported.
"The reason he's wrong is that we at D-Wave are commercial today," Baratz told CNBC in an interview.
Huang said during an analyst Q&A session Tuesday that it will be 15 years at the earliest before "very useful quantum computers" are available, and could be as long as 30 years.
Baratz disagreed with Huang's assessment by saying that various companies are already using D-Wave Quantum's quantum computers. "Not 30 years from now, not 20 years from now, not 15 years from now," Baratz told CNBC. "But right now today."
Shares of D-Wave Quantum fell 36% during Wednesday's trading session, but rose 6.4% in after hours activity.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
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NVDA Stock Watch: How Nvidia Could Generate $200 Billion in Revenue This Year
The stock most identifiable within the artificial intelligence (AI) trade has been Jensen Huang-led Nvidia . The Santa Clara, California-based chip giant has witnessed a scorching rally, rising 172% over the past year and an eye-popping 2,194% in the last five years. This has led to the company commanding a gargantuan market capitalization of $3.66 trillion, second only to iPhone maker Apple .
Nvidia is not resting on its laurels. The company continues to innovate, with one of its latest accomplishments being the unveiling of the next generation of its GeForce RTX GPUs. Commenting on it, Huang said, “Blackwell, the engine of AI, has arrived for PC gamers, developers and creatives. Fusing AI-driven neural rendering and ray tracing, Blackwell is the most significant computer graphics innovation since we introduced programmable shading 25 years ago."
Analysts remain enthused about this most recent development around the company with projections of revenues of $200 billion from this launch alone. However, there remain other significant drivers for the stock as well, and any fresh investment into it could still lead to material upside for new investors. Let’s have a closer look.
Solid Fundamentals
As Nvidia has emerged as a key player in the chip industry, its revenue and earnings have also soared. Over the past 10 years, the company clocked revenue and earnings CAGRs of 37.84% and 59.72%, respectively.
Nvidia continued on its spree of reporting record quarterly revenues in the third quarter of 2024. Revenue came in at $35.1 billion, beating estimates of $33.2 billion, and earnings per share of $0.81 beat estimates of $0.75. Notably, this marked the eighth consecutive quarter of earnings beats from the company.
Further, analysts are forecasting that Nvidia will continue to outpace the industry in terms of revenue and earnings growth with forward revenue and earnings growth rates pegged at 93.49% and 189.58% compared to the sector medians of 5.62% and 8%, respectively.
Net cash from operating activities rose to $17.6 billion compared to $7.3 billion in the year-ago period. Overall, Nvidia exited the quarter with a cash balance of $38.5 billion with no short-term debt on its books.
Growth Drivers
Nvidia is maintaining its dominance in the AI chip market, benefiting from the increasing demand for generative AI and accelerated computing. The major hyperscalers — Amazon , Microsoft , Google , and Meta — are expected to collectively increase their data center capital expenditures from $200 billion to $300 billion year-over-year, a growth rate of 50%, according to Morgan Stanley. With Nvidia holding a 90% market share in AI accelerators, the company is poised to capture the majority of this spending, driving significant revenue growth.
Meanwhile, Nvidia’s current Blackwell GPU platform delivers notable advancements in AI and high-performance computing. Early benchmarks show it offers up to 2.5 times faster performance in AI training and up to 15 times higher inference speeds compared to its Hopper architecture predecessor. These GPUs are designed to suit various configurations, including air-cooled, liquid-cooled, x86, and ARM-based systems, ensuring broad adoption across enterprises and data centers. The company is also preparing to launch its next-generation Rubin platform in 2025 or 2026, which is expected to further strengthen its market leadership.
In addition to its hardware, Nvidia’s competitive edge lies in its integrated software ecosystem. The CUDA platform and InfiniBand networking enable efficient scalability for AI development. Its software tools, such as Nvidia AI and Omniverse, simplify AI deployment and help retain customers. Nvidia Inference Microservices, introduced recently, enable the quick deployment of AI models at scale, reducing deployment times from weeks to minutes and working seamlessly across Nvidia's massive GPU base.
Further, Nvidia’s AI accelerators, including its H100 Tensor Core GPUs, play a critical role in driving innovation in data centers, edge computing, autonomous vehicles, and other applications. These GPUs, currently the fastest on the market for handling AI and high-performance workloads, are integral to developing sovereign AI systems for enterprises and governments. The company is also set to release the MI300X processor to further enhance machine learning capabilities.
Management remains optimistic about sustained growth through 2025 and beyond, driven by the rising adoption of accelerated computing, expanding generative AI applications, and strong enterprise and internet sector growth. Nvidia’s comprehensive offerings, combining leading-edge hardware with robust software support, position it well to meet the growing demand for AI-driven solutions across industries.
Analyst Opinions on NVDA Stock
Overall, analysts continue to remain bullish on Nvidia stock. The consensus rating is a "Strong Buy,” with a mean target price of $175.55, indicating upside potential of about 25.3%.
Out of 43 analysts covering NVDA stock, 36 have a “Strong Buy” rating, 3 have a “Moderate Buy” rating, and 4 have a “Hold” rating.
On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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Nvidia, Advanced Micro Devices in Talks With Dutch Government on AI Facility Development
Nvidia and Advanced Micro Devices will be in discussions with the Dutch Government for the creation of an artificial intelligence facility in the Netherlands, the Dutch government said Thursday.
The facility will focus on the development and application of AI, leveraging an AI supercomputer.
As part of the discussions, the government is exploring the supply of essential hardware and expertise from Nvidia and Advanced Micro Devices to help build the necessary infrastructure.
Nvidia and Advanced Micro Devices did not immediately respond to MT Newswires' requests for comment.
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Dj Asml Orders Likely To Ramp Up From 1Q - Market Talk
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Jefferies sees limited upside for semis in 2025, Infineon top pick
Investing.com - A recent jump in semiconductor stocks is tipped to hit a plateau later this year, according to analysts at Jefferies.
Chipmakers soared in 2024, reflecting a spike in interest in the processors needed to power the data centers that undergird the development of AI. For the year, the sector-wide Philadelphia Semiconductor Index surged by more than 19%.
In particular, shares in Nvidia (NASDAQ:NVDA), whose AI-optimized chips have become synonymous with the hype around the applications of the nascent technology, rose by 171% last year.
Although they expect this increase in semiconductor names to peak in the "March-April" period at around 24% year-over-year growth, the Jefferies analysts led by Janardan Menon argued in a note to clients that the "upside potential for most chip stocks should be modest" in 2025.
"[S]ince demand in major end-markets like PCs, smartphones, general servers, [Internet of Things], consumer electronics and networking is still weak and inventory levels are low, we do not forecast any downcycle this year," the analysts wrote. "Instead we forecast a plateauing of the semiconductor cycle at healthy double-digit growth for the rest of 2025."
Price trends in chip shares are expected to "flattish", the analysts said, adding that the direction of these stocks over the next 12 months will likely depend on how confident investors are in these firms' outlooks for revenue and earnings growth in 2026.
In terms of specific stocks, the analysts said they prefer Dutch wafer manufacturer ASM to domestic peer ASML (AS:ASML), arguing that ASM is "most geared" to benefit from rising spending on advanced logic chips and has lower exposure to ructions in the Chinese market.
They noted that ASML, "while de-risked for 2025", needs to achieve 5 billion euros to 6 billion euros worth of orders per quarter to meet 2026 expectations. But this goal may be complicated by major customer Samsung (KS:005930), who has been hit by extra costs as it pushes to supply high-end chips to Nvidia, the analysts said.
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