On Monday, NVIDIA Corporation (NASDAQ:NVDA) received a revised share price target from Barclays, with the new target set at $1,100, up from the previous $850. The firm maintained an Overweight rating on the stock.
This adjustment comes after the analyst's review of the Asia supply chain, which indicated a potential increase in data center (DC) GPU units for NVIDIA, projecting close to a 10% rise in the April quarter and just over 20% in the July quarter.
The supply chain's expectations have remained consistent with previous projections for both the April and July quarters. The analyst believes NVIDIA could see incremental revenue gains due to pricing on its H200 series, which is expected to start shipping in the July quarter. Additionally, the transition to the B-series is anticipated to occur later in the year, likely in the fourth quarter.
Looking into 2025, the supply chain forecasts the launch of GB systems ahead of the standalone Blackwell GPUs, with the H-series expected to maintain a significant share of the total product mix, aligning with management's previous comments.
Despite investor concerns about a potential slowdown before the Blackwell launch, current insights do not support this, as the tone from supply chain checks has remained mostly unchanged.
The analyst's checks suggest that NVIDIA is on track to exceed revenue expectations, with over $1 billion in upside potential in April and $2 billion in July. For the April quarter, the data center segment is predicted to perform better than expected, potentially reaching around $23 billion in revenue, including approximately $3.5 billion from Mellanox Technologies (NASDAQ:MLNX).
For the July quarter, further DC revenue upside is anticipated, with projections of about $24.5 billion, compared to the street's estimate of $22.8 billion, which includes a Mellanox contribution of roughly $3.75 billion.
The report also highlighted the upcoming revenue boost from the ramp-up of the GB200 series, emphasizing that NVIDIA has spoken positively about the shift towards the GB200 solution for hyperscalers, a transition that the analyst suggests is not yet fully recognized by the market.
InvestingPro Insights
With NVIDIA Corporation (NASDAQ:NVDA) receiving an upbeat price target from Barclays, the latest data from InvestingPro provides additional context to the company's financial health and market performance. NVIDIA is currently trading at a high P/E ratio of 76.88, reflecting a significant expectation of earnings growth, which aligns with analysts' anticipation of sales growth in the current year. The company's revenue for the last twelve months as of Q4 2024 stands at an impressive $60.92 billion, showcasing a remarkable year-over-year growth of 125.85%. This robust revenue growth is complemented by a substantial gross profit margin of 72.72%, indicating efficient cost management and strong pricing power.
Investors should also note that NVIDIA's stock price has experienced a strong return over the last year, with a 195.9% increase, and is trading near its 52-week high, at 94.95% of the peak value. These metrics underscore the company's momentum and the market's optimistic outlook. For those considering an investment in NVIDIA, the company's status as a prominent player in the Semiconductors & Semiconductor Equipment industry, combined with its ability to maintain dividend payments for 13 consecutive years, may offer an attractive blend of growth and stability.
For a deeper dive into NVIDIA's financials and to access more InvestingPro Tips, such as the company's liquidity and debt levels, visit https://www.investing.com/pro/NVDA. There are 21 additional InvestingPro Tips available, providing a comprehensive analysis of the company's financial health and market position. Use the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription to gain full access to these insights.
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