Analysts recommend Nvidia and Microsoft stocks for growth

Artificial intelligence (AI) stocks have faced challenges recently due to fears of a recession triggered by tariffs from the Trump administration. The popular group of tech stocks known as the "Magnificent Seven" have all seen declines in value this year, with most dropping over 10%. However, some Wall Street analysts are optimistic about two companies: Nvidia and Microsoft. Analyst Vivek Arya from Bank of America has set a target price of $200 for Nvidia shares, indicating a potential rise of 69% from its current price of $118. This could give Nvidia a total market value of $4.8 trillion. Meanwhile, analyst Brent Thill from Jefferies predicts Microsoft's shares could reach $550, suggesting a 42% increase from its current price of $386, leading to a market value of $4.1 trillion. Nvidia is a leader in AI technology, producing graphics processing units (GPUs) that drive many advanced AI systems. Despite a recent drop in stock price due to worries about competition and government export controls affecting sales to certain countries, Nvidia has new products like the Blackwell GPUs that may boost sales. The company is well-positioned to grow as the demand for AI technology increases. On the other hand, Microsoft is the largest software company and a major player in cloud computing. Sales in both these sectors are expected to rise significantly in the coming years. Although Microsoft experienced a decline in stock value following questions about its AI spending, its cloud services are expected to benefit from lower training costs for AI models. The company recently reported strong growth in its AI revenue, which has surpassed $13 billion. Analysts forecast that Nvidia's earnings will grow at 39% annually, while Microsoft's earnings are expected to rise at 13% annually through the next few years. Although there are uncertainties in the market, both companies present opportunities for long-term investors.