NVIDIA Corp. (NVDA) shares have been flying higher all year as the chipmaker pushes into new markets. But despite a stock that is up 84% in 2017, Goldman Sachs thinks there’s more room for it to climb, setting a $217 price target on the shares, up from $193.

Goldman Sachs analyst Toshiya Hari also reiterated his conviction buy rating on the graphics chip company, saying in a research report covered by StreetInsider that he left the GTC Europe Conference this week, at which NVIDIA Chief Executive Jensen Huang gave the keynote and unveiled a new semiconductor for the autonomous vehicle market, more positive on the stock. The analyst is particularly bullish on the Santa Clara, Calif., tech firm's prospects in the inferencing market with its new graphics processor unit (GPU) Volta architecture as well as its deep learning inference optimizer TensorRT.  (See also: NVIDIA Launches Chip for Autonomous Vehicles.) At $217, Hari thinks shares can appreciate an additional 14%.

GPUs Improve

Currently, NVIDIA’s AI chips are used in the data center to train the systems to analyze and work better with the volumes of data that are compiled. In the future, the idea is that once those systems are trained they can be used for all sorts of devices, be it a drone, self-driving car or refrigerator. Late in September, the company announced it inked a partnership with JD.com to bring AI to delivery drones. The companies said the idea is to reduce the delivery costs when sending packages to rural China. JD.com is one of the leading e-commerce players in China. It’s also an example of how NVIDIA is leading in the inference area of AI.  

According to Hari, regular CPUs have long been the dominant chips in the marketplace, and GPUs still have a “significant runway” given performance improvements. The analyst raised his full-year 2018 EPS estimate on NVIDIA to $3.75 from $3.71 and full-year 2019 EPS estimate to $5.86 to $5.53. Looking out to full-year 2020, the analyst expects EPS of $7.69, up from $7.26. (See also: Barclays Raises NVIDIA PT to $200.)

Recently, shares of NVIDIA were trading up $1.50 or $0.79% to $190.43. The stock was surging in trading on Tuesday after it announced its new CPU for the self-driving car market. During a presentation in Munich, NVIDIA’s Huang said the semiconductor enables so-called Level 5 driverless vehicles, which means the cars and trucks can operate without any intervention from a human. A Level 3 self-driving car still requires a steering wheel and driver who can take control if the vehicle runs into problems, while Level 4 enables autonomous driving in lanes dedicated to the technology. Huang said the chip has a massive amount of processing power to enable the vehicles to operate without human help. The company was able to get it into a form factor the size of a license plate.

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