Meet the latest stock split AI stock in the Dow Jones. It's up 925% in two years, and Wall Street says it's still a buy

Semiconductor company Nvidia (NASDAQ:NVDA) has been one of the hottest stocks on Wall Street since the launch of ChatGPT sparked the artificial intelligence (AI) boom. In fact, Nvidia stock is up 910% in the last two years, making it the best-performing company S&P 500 (SNPINDEX: ^GSPC). This price increase also led to a 10-for-1 stock split earlier this year.

Last week, S&P Global said Nvidia would join the blue chip Dow Jones Industrial Average (DJINDICES: ^DJI) Stock selection is not subject to any specific rules, but the index committee generally selects companies that meet three criteria: They typically have an excellent reputation, demonstrate sustainable earnings growth, and are followed by a large number of investors.

Start your morning smarter! Wake up with Breakfast News in your inbox every market day. Register for free »

Importantly, Wall Street is still overwhelmingly bullish on Nvidia despite the recent rise in its share price. In fact, 92% of the 64 analysts who follow the company rate the stock as a Buy. Additionally, the median price target of $150 per share implies an 11% upside from the current share price of $135.

Here's what investors should know about Nvidia:

Central processing units (CPUs) can handle complex computing tasks such as artificial intelligence (AI), but graphics processing units (GPUs) are better suited to such workloads because they can perform technical calculations faster and more efficiently. Nvidia dominates the data center GPU market and its AI accelerator revenue share exceeds 80%.

Importantly, many analysts expect the company to maintain its market share for at least two to three years. One reason for this confidence is CUDA, a robust ecosystem of software development tools that Nvidia has been building for nearly two decades. CUDA optimizes data preparation, model training, and application development for various AI use cases, including conversational chatbots, content generation, and autonomous machines.

Another reason analysts expect Nvidia to maintain its dominance in AI accelerators is its involvement in other hardware verticals. Nvidia, for example, is the market leader in AI networking devices and recently introduced its first server CPU for data centers. According to CEO Jensen Huang, this allows the company to build tightly integrated AI systems with lower operating costs than those stitched together with products from multiple vendors.

In May, Toshiya Hari joined Goldman Sachs wrote: “We believe Nvidia will remain the de facto industry standard for the foreseeable future because of Nvidia's competitive advantage that includes its hardware and software capabilities, as well as the installed base and ecosystem it has built over several decades the speed at which it does this includes.” is and will be innovative in the coming years.

The story continues