NVIDIA Corporation top brass is beaming as the firm outpaced consensus estimates in its first quarter financials, leaving analysts hopeful for the future.
NVDA Analysts: Among those feeling bullish is Needham’s Rajvindra Gill, who amended his buy rating to a $460 price target. He had previously pinned it at $300, while Oppenheimer’s Rich Schafer also upped his target, from $350 to $420.
Morgan Stanley’s Joseph Moore raised his rating to $450 from $304, while Bernstein’s Stacy Rasgon now tops out at $475, an increase of $175 from her earlier $300. Rosenblatt’s Hans Mosesmann’s target vaulted from $320 to $600, and Bank of America’s Vivek Arya currently puts NVIDIA’s true value between $340 and $450.
Finally, Wedbush’s Matt Bryson boosted his neutral rating to outperform, with the buy side’s price target jumping from $290 to $490.
Related Link: Trading Strategies For Nvidia Stock After Q1 Earnings
Needham’s Gill suggested NVIDIA could become the first-ever $1 trillion semiconductor firm. “While there were some peaks and valleys in the interim years, we believe NVDA is in a position to achieve that valuation over time,” he said.
With customers racing to fulfill generative AI demand, which aligns with NVIDIA’s business model, divisions like gaming are seeing unexpected growth. This positively boosts guidance while increasing price targets across the board.
For Oppenheimer’s Schafer, who said NVIDIA has “reset the bar,” this firm is best positioned to take advantage of the data center shift from general-purpose to accelerated computing. He added “Nvidia has transformed from a graphics company to a premier, leading AI computing platform company.”
“Remarkable” is how Morgan Stanley’s Moore described NVIDIA’s first quarter. Boosted by a surge in AI spending, the company is already gaining on later-than-expected guidance. “Nvidia guided to revenue that we were forecasting they would hit in early 2025, as data center revenue surpasses combined Intel and AMD data center revenue,” Moore said. The analyst called NVIDIA’s coming Q2 “a blowout” and is confident the outlook augurs more stock gains.
For Bernstein’s Rasgon, NVIDIA’s Q1 results were “extremely strong,” with upside surprises in most business areas. Bernstein attests “we have never seen a guide like the one NVDA just put out with FQ2 outlook that was by all accounts cosmological…a massive surge in generative AI demand could see the data center segment up by 100% YoY.”
In what Rosenblatt’s Mosesmann calls the “Mother of All Cycles,” NVIDIA’s growth is not just historical, it’s also consistent with the belief that there is a secular change in semiconductor growth ahead. “Nvidia is often conservative when it comes to revision cycles…upside like this has at least historically been followed by more upside,” Mosesmann said.
Likewise, Bank of America’s Arya sees NVIDIA as a top pick with its enterprise opportunity, strength in AI, and free-cash-flow generation. Those Q1 earnings were impressive, but the true focus is on the guidance, said the analyst. “This is the largest raise we have seen in our coverage, driven by the start of major data center investments in generative AI and large language models,” Arya said. As for NVIDIA becoming the “unquestionable AI leader,” with a full-stack platform of accelerators, Grace CPU, networking, and software, Arya convincingly claims “to $1 trillion and beyond for the AI leader.”
Wedbush’s Bryson added his voice of approval, relishing the fact that NVIDIA exceeded even the most bullish expectations regarding AI-related growth. He further indicated that the data center segment is going to experience a growth exceeding 100% YoY. Even while the excitement builds for NVIDIA, Bryson reminds everyone to monitor demand levels and to view the Q2 and F2024 revenue levels as a new norm on which to base forward estimates.
As for market reaction, NVIDIA is up 25% at $383, a new 52-week high, as of the time of writing. Expectations remain high, leading Bank of America to very aptly predict “To $1 trillion and beyond for the AI leader.”