One Wall Street firm foresees Nvidia (NASDAQ: NVDA) shares rising as the chipmaker benefits from governments using artificial intelligence technology to monitor its citizens.
UBS raised its price target to $285 from $266 for Nvidia shares, citing the company's leadership in the machine learning chip and software markets.
Nvidia offers what it calls a "Metropolis" platform, helping governments to use its A.I. technology to analyze video feeds. The offering helps cities provide traffic monitoring, law enforcement and public safety services.
The analyst predicts the "mass facial recognition and traffic monitoring" market will be an additional $5 billion sales opportunity for Nvidia by 2020. He estimated the company has nearly 90% share of the current A.I. chip market.
"Our recent analysis of mass, real-time facial recognition in China, and its potential spread to other countries has uncovered a potential high-/mid-single digits growth tailwind for NVDA earnings," analyst Timothy Arcuri said in a note to clients Monday entitled "Deep Learning & Mass Surveillance: Tied at the Hip."
Arcuri reiterated his neutral rating for Nvidia shares due to the stock's valuation.
Most recent developments involving came to fruition last Friday, on word the company will replace Time Warner Inc. (NYSE: TWX) in the S&P 100
NVIDIA, headquartered in Santa Clara, CA, operates as a visual computing company.
Nvidia shares are up 37% this year through Friday versus the S&P 500's 4% gain. They opened Monday morning down $1.32 to $263.94.
