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Tech giant Amazon and graphics processing unit (GPU) leader Nvidia are poised for significant gains, according to analysts. Amidst their already impressive performance, both stocks still have plenty of untapped potential, with Amazon having a potential upside of 58% and Nvidia with an implied upside of 122% over the next 12 to 18 months.

Amazon, known for its diverse business ventures in e-commerce, cloud computing, digital advertising, streaming video, and more, has captured a significant portion of the market. The company currently holds approximately 38% of all e-commerce transactions in the United States, surpassing the combined share of the next 14 online retailers. Its dominance in various sectors and continuous innovation are factors that analysts believe will drive the stock to new highs.

Despite concerns about the state of the economy, the recent cooling of inflation and the possibility of interest rate cuts have provided a positive outlook. As the leading digital retailer, Amazon is expected to benefit from the anticipated increase in consumer spending. Additionally, the accelerating adoption of cloud computing and artificial intelligence (AI) presents a significant opportunity for the company. Its subsidiary, Amazon Web Services (AWS), maintains a 30% share of the cloud infrastructure services market and stands at an advantage compared to rising competition. Demand for generative AI is expected to further boost growth, as AWS expands its AI services for customers.

Redburn analyst Alex Haissl remains remarkably bullish on Amazon, maintaining a buy rating and raising the price target to $230, implying an additional upside of 58%. Haissl emphasizes that investors are underestimating the speed at which Amazon's growth will reaccelerate, describing the outlook as "exceptional." This sentiment is echoed by the majority of analysts, as 51 out of 53 rated Amazon as a buy or strong buy in October, with none recommending selling.

Nvidia, on the other hand, has become the indisputable winner in the growing demand for generative AI. The company's GPUs are considered the gold standard for AI processing, and the recent release of its next-generation H200 Hopper chip has further solidified Nvidia's position in the market. The new AI superchip boasts nearly double the capacity and 2.4 times more bandwidth than its predecessor.

Nvidia's growth in this sector is evident in its recent financial results. The company reported record revenue of $13.5 billion in its fiscal 2024 second quarter, a staggering 101% increase compared to the previous year. Its diluted earnings per share also surged by an impressive 854%, driven by a 171% jump in data center revenue, mainly attributed to the adoption of generative AI.

Rosenblatt analyst Hans Mosesmann maintains a buy rating on Nvidia, raising the price target to $1,100, suggesting a potential upside of over 122%. Mosesmann points to the company's unprecedented triple-digit year-over-year revenue growth in the last quarter and a similar forecast for the current quarter. Additionally, the data center market is undergoing a paradigm shift to support high-performance computing and generative AI, offering Nvidia ample opportunities for future growth.

Overall, the positive sentiments towards both Amazon and Nvidia are shared among analysts. The significant potential for growth, coupled with their strong market positions, has attracted widespread optimism. Despite the recent appreciation in their stock prices, both companies are still perceived as opportunities for long-term investment.

Disclaimer: The information provided in this article is based on data available at the time of writing. Investors are advised to conduct thorough research and analysis before making investment decisions.