Shares of Nvidia (NVDA) are rising Tuesday afternoon as Bank of America (BAC) raises its price target for the chipmaker to $650 per share. Analysts cite the AI chips as a decent upgrade for the company. The company will report its quarterly earnings next week on Tuesday, November 21.
Snap Inc. (SNAP) shares are also moving higher as Amazon (AMZN) reportedly reached a deal to run shopping ads for Amazon on Snapchat, according to The Information. This will supposedly make it easier for users to connect their accounts and buy products from Amazon through the social media app.
Airbnb (ABNB) is rising as well since it announced on Tuesday that it has acquired GamePlanner.AI for an undisclosed sum. The 12-person start up is notable for co-founder Adam Cheyer, who was one of the founders of Apple's voice assistant Siri. The acquisition is a part of move from Airbnb to continue to expand their AI capabilities.
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JOSH LIPTON: Bullishness on Wall Street as Bank of America raises its price target on Nvidia to a street high of $650. Bank of America analyst calling the company's new AI chips a notable upgrade. Shares of Nvidia set to rise for 10 consecutive sessions now. This coming as the chip maker gears up to report its quarterly earnings results. That's happening next week.
So in the green here again, Julie. This week of course announces updates to its AI chips, right, with that-- what it's calling the H200. That was an upgrade to its H100 processor, where we of course had the great Dan Howley on explaining that all to us. More capabilities. We know rivals are circling. AMD, Intel, the cloud giants, the hyperscalers, they're designing their own chips. But Wolfe Research telling clients this new AI chip further expands Nvidia's competitive moat. And of course, that's what Nvidia bulls like to hear.
JULIE HYMAN: It is. At the same time, you wonder, at what point does Nvidia get overhyped, right? You know, just when you think it's going to happen and it falls back a little bit, it rallies again with this 10th consecutive day that it's up. It does report its numbers at the end of the month, although I guess we're getting towards the end of the month. It reports its numbers on the 21st-- so one week from today.
And you have to wonder, will that be a sort of sell-the-news event, right? Is there any way that this company can meet the lofty expectations that are being priced in here? If you look at the forward PE, it's about 45, 46. The trailing PE is over 100.
So does valuation even matter when investors have put so much stock in the dominance of Nvidia in the AI space? Perhaps not. But it's going to be really interesting a week from today, as we're breaking those numbers, to see what the stock reaction is going to be.
JOSH LIPTON: Yeah, they had been-- remember, it had been under pressure. We had talked about that because of those US export rules impacting sales of chips to China, big markets. So I think that'll be another really interesting question. How are they thinking about that when they report on the 21st?
JULIE HYMAN: Right. It was under pressure and then came right back up again. All right, let's talk about Snap as well. It is also moving higher after Amazon reportedly reached a deal that would run shopping ads on Snapchat. That's according to the information the tech news site and newsletter. And the report did cite a spokesperson from Amazon but said Snap didn't comment on this. We haven't gotten any comment from the company either.
But a Jefferies analyst is saying that this partnership quote has the ability to solve Snap's two biggest challenges-- scaling ad demand and improving ad performance. Snap's actually done pretty well this year.
JOSH LIPTON: Yeah, up around, I think, 30%, 35%. I will say, you know, Mark Mahaney, well-known, well-respected analyst over at Evercore, he was less confident about this one. He wasn't as excited. You know, to his clients, he was saying he thought this would be less confidence that there would be a meaningful positive for Snap, as he thinks there's overall less commercial intent on Snapchat, as opposed to, he says, like a Meta or a Pinterest. But clearly, investors right now seem excited by that news. That stock is rocking.
JULIE HYMAN: I am not a Snapchat user. So I can't speak to commercial intent. You?
JOSH LIPTON: Me neither.
JULIE HYMAN: No?
JOSH LIPTON: No, no. We'll ask the young 'uns in the newsroom. They know.
JULIE HYMAN: Oh, are you going to have more to say about this next one, like we heard yesterday, an Airbnb anecdote?
JOSH LIPTON: I've done enough, Julie. I've done enough.
JULIE HYMAN: OK, OK.
JOSH LIPTON: Airbnb shares rising after making its first acquisition as a public company. Airbnb acquired AI company GamePlanner.AI. CEO Brian Chesky saying GamePlanner will focus on accelerating select AI projects and integrating their tools into Airbnb's platform.
So kind of vague there on what exactly we're doing. But GamePlanner.AI-- now, reports say this deal, by the way, if you want to put a price tag on it-- reportedly, the deal's valued at just under $200 million. The start-up does have some cred-- cofounded by one of the founders of Siri, which was, of course, acquired by Apple.
And Airbnb Chesky, Brian Chesky, he has talked about AI in the past, Julie, how the technology could help Airbnb better utilize and personalize the company's data. So perhaps that's what he's thinking here.
JULIE HYMAN: Yeah, perhaps so, because all we can do is guess because we didn't get a lot of details on what exactly, how exactly this is going to be integrated. It's only a 12-person company. It's in stealth mode. So maybe that's why we are not learning more about this. It's the company's, Airbnb's, first acquisition going back to 2019. So I think we'll just kind of have to see.
I mean, there are some sort of macro headwinds potentially for Airbnb, right? Are we going to see travel slowing down? Although as we talked about, Bernstein is bullish on Airbnb because they think lodging is going to continue to hold up well. There's also been some regulatory pressure on Airbnb, even in the likes of here in New York City, where we've seen a crackdown on people renting them out. So, you know, can they make up for some of that with more customized solutions? I think I just want more info on this one.
JOSH LIPTON: Yeah, I mean Chesky has talked about how maybe he uses AI, the technology, to kind of transform Airbnb from a company, a platform into more of a travel concierge. So maybe that's what--
JULIE HYMAN: So if you go into an Airbnb and you find, for example, that it's not as clean as you would like it to be, instantly, someone can come in--
JOSH LIPTON: That's the idea.
JULIE HYMAN: --and clean it up.
JOSH LIPTON: There'll be an AI bot. It'll take care of all our problems.