Nvidia’s AI Success Impresses Analysts

by Warren Seah

Analysts were in awe of the latest earnings report from Nvidia Corp., with many expressing their praise for the chip giant’s ongoing success in the artificial intelligence (AI) industry.

TD Cowen analyst Matthew Ramsay described the results as “simply astounding” and offered glowing remarks about the company’s guidance. He stated that there was not much more to be said about Nvidia’s exceptional performance.

One of the main concerns on Wall Street is whether Nvidia can sustain its impressive results. However, Ramsay pointed out that AI is more than just hype and believes that Nvidia’s dominance in the field is far from over.

Ramsay emphasized that we are currently witnessing a pivotal moment in the accelerated computing era, driven by the insatiable demand for Generative AI. He reassured investors that Nvidia’s position in the market is strong, despite the alluring nature of this lucrative sector attracting competition.

Based on his analysis, Ramsay raised the price target for Nvidia’s stock to $600 from $500 while maintaining an outperform rating.

Bernstein analyst Stacy Rasgon shared a similar sentiment regarding Nvidia’s competitive advantages and potential.

Rasgon highlighted that many investors have been searching for alternative ways to participate in the AI boom without the high cost associated with Nvidia’s stock. However, he believes that Nvidia remains the best option and predicts that the stock will still be reasonably priced, even after substantial earnings revisions.

Although Rasgon acknowledged concerns about sustainability, he does not believe that investors should worry about it just yet.

Nvidia: A Dominant Force in Compute Evolution

Despite the significant size of Nvidia’s datacenter profile, industry experts are not concerned about sustainability at the moment. Both analysts and investors believe that the company’s trajectory is on track for the next year. With a strong supply/demand visibility, as well as the potential for new product introductions and ramps, Nvidia is poised for success.

Analyst Matthew Prisco from Evercore ISI shares the positive sentiment, acknowledging concerns about fluctuation in hyperscalers and the transition from training-centric AI builds to inference-based builds. However, he remains optimistic about the compute demand profile, driven by acceleration adoption and AI functionality. Prisco believes that any potential digestion pockets will be limited through calendar 2024.

The market response to Nvidia’s recent performance has been overwhelming. Prisco describes it as “sensational” and predicts even greater achievements for the company. It is becoming increasingly evident that Nvidia is the dominant force in the evolving compute landscape. The company is still in the early stages of its growth, positioning it for long-term success.

Supporting this view, Prisco maintains an outperform rating on Nvidia’s shares and raises his price target to $600 from $550.

Even analysts who were initially hesitant about Nvidia’s prospects have been swayed by its impressive results. Stifel’s Ruben Roy upgraded the stock from hold to buy, citing the potential shift of $1 trillion of installed data center infrastructure towards accelerated compute architectures. Roy also adjusted his price target to $600 from $440, further underlining the positive outlook for Nvidia.

In summary, Nvidia’s dominance in the compute evolution is undeniable. The company’s recent achievements and future potential have attracted widespread optimism among analysts and investors, solidifying its position as a leading force in the industry.

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