More analysts chime in with increasingly upbeat views ahead of next week’s earnings report
Ever more analysts say Nvidia Corp.’s stock can still thrive despite a high hurdle for the chip giant’s next earnings report.
“While expectations aren’t exactly low, a more modest beat/raise [versus last quarter] and talk of visibility extending into 2024 should keep the stock going, in our view,” Raymond James analyst Srini Pajjuri wrote late Tuesday as he boosted his price target on Nvidia’s stock NVDA, -1.03% to $500 from $450 and kept a strong buy rating.
In his view, “GPU demand is significantly outpacing supply on AI spending boom despite mixed cloud capital-expenditure trends.”
Nvidia is due to report results for its July quarter on Aug. 23.
Harsh Kumar of Piper Sandler adjusted his price target in the same way, while predicting upbeat results for the latest quarter and a better-than-expected forecast.
“Following up on an impressive guide-up driven by the data center segment last quarter, we now model $9.5 billion in data-center revenues for the October quarter guidance,” Kumar wrote. “We feel that this sets the company up to finish [fiscal 2024] with ~$32 billion in data center revenues which we expect to further grow in FY25 due to the continued penetration of accelerated data centers and continued leading market share for AI applications.”
He flagged that the company could be seeing a near-term demand boost in China given anticipation of additional export restrictions from the U.S. government.
Kumar has an overweight rating on Nvidia shares.
Meanwhile, Barclays analyst Tim Long cheered Nvidia as “the best of the AI names” and his favored pick.
Nvidia “is our favorite way to invest in the AI theme as they have thus far monopolized the economics of the AI boom, with no clear competitor close behind,” Long wrote, as he kept his $600 price target and overweight stance intact. “Enterprise spend has weakened, and cloud capex budgets are being funneled towards AI.”
Long alluded to “high expectations” for Nvidia but said he and his team “struggle to envision a scenario where the stock doesn’t work on a big beat-and-raise (especially given large retail support).”
Shares have more than tripled so far this year.
Analysts at Morgan Stanley, UBS and Wells Fargo also cheered Nvidia’s earnings potential earlier this week.
Nvidia’s stock was brushing off a small chip-sector selloff Wednesday. Shares were up 0.6% in morning trading Wednesday, while the PHLX Semiconductor Index was off 0.5%. Shares of rival Advanced Micro Devices Inc. were among the steepest decliners in the sector, down nearly 3%.