Nvidia Shares Soar as Analysts Raise Targets Ahead of Report, Will It Beat Expectations Again?
$NVIDIA (NVDA.US)$ shares soared on Monday as more analysts raised their price targets on the stock, a sign of growing optimism about the chipmaker's highly anticipated results later this week.
The average price target for the stock has been moving steadily higher recently, and is above $520, up from $505 just a week ago. The current target implies an upside of about 11% from current levels. HSBC, KeyBanc Capital Markets, and BMO Capital Markets are among the latest firms to boost their targets ahead of the Aug. 23 release of Nvidia's second-quarter results.
The report is expected to show significant demand for the chips used to process AI services. Revenue is seen rising 65% from the year-ago period, according to data compiled by Bloomberg.
Wall Street expects the chip company to guide for a rise of about 110% in third-quarter revenue to $12.50 billion, according to Refinitiv. Nvidia has only missed EPS estimates twice in the past two years.
Although market expectations have clearly risen for Nvidia and the overall AI supply chain, we expect bullish AI server momentum continued to surpass market expectations," wrote HSBC analyst Frank Lee, who has a buy rating on the stock.
The company has been the biggest beneficiary of the rise of ChatGPT and other generative artificial intelligence apps, virtually all of which are powered by its graphics processors. Jensen Huang, Nvidia's co-founder and chief executive, has since kept raising the bar. To maintain its leading position, his company has also offered customers access to specialized computers, computing services and other tools of their emerging trade. That has turned Nvidia, for all intents and purposes, into a one-stop shop for A.I. development. While $Alphabet-A (GOOGL.US)$, $Amazon (AMZN.US)$, $Meta Platforms (META.US)$, $IBM Corp (IBM.US)$ and others have also produced A.I. chips, Nvidia today accounts for more than 70 percent of A.I. chip sales and holds an even bigger position in training generative A.I. models, according to the research firm Omdia.
I've been covering tech since 1994 and I have never seen an environment where you are so dependent on one company to deliver," said Inge Heydorn, partner at GP Bullhound, which owns both Nvidia and $Advanced Micro Devices (AMD.US)$ shares.
Source: Reuters, Benzinga, YahooFinance, The New York Times
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TobbyStock : This is a bullish AI stock, and options are on fire.
Shootingstar : Gpu instead of cpu for ai??? To me this is absolutely nonsense and a scam
Silverbat : The demands of AI chips in next 5 years are beyond their predictions.
leew1966 : gpu's are much stronger and faster than cpus, lots of supercomputers use them along with gpu fueled ai