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Benchmark calls NVIDIA a 'unique growth property', raises shares PT by $350

Published 05/23/2024, 08:27 AM
Updated 05/23/2024, 08:30 AM
© Reuters.

On Thursday, Benchmark maintained a Buy rating on NVIDIA (NASDAQ:NVDA) while raising the price target to $1,350 from the previous $1,000. The adjustment reflects the firm's confidence in the company's performance and growth trajectory following its recent financial results and forward guidance.

NVIDIA's April earnings and July projections surpassed most Wall Street expectations, prompting Benchmark to continue endorsing the stock without reservations. Despite concerns over the sustainability of NVIDIA’s rapid growth, the firm sees no immediate reason to alter its positive stance on the company’s shares. NVIDIA has established a dominant position in the fields of accelerated computing, generative AI, and inferencing.

The company has also significantly expanded its portfolio, catering to a broad range of customer needs across various industries. NVIDIA's focus on total system-level solutions and its efforts to increase capacity are designed to meet the growing global demand.

Benchmark believes NVIDIA is well-positioned to lead the market in the adoption of Generative, Inferencing, and Large Language Training Models across numerous industry verticals, cloud, and enterprise computing, as well as among a widening base of sovereign entities.

Benchmark's revised price target is driven by positive estimate revisions and the belief that NVIDIA's unique growth prospects will continue to attract investors willing to support the company's premium valuation multiples.

''We reiterate our Buy rating and are increasing our Price Target to $1,350 from our prior $1,000, driven by our positive estimate revisions and our view that NVDA is such a unique growth property'', the analyst noted.

InvestingPro Insights

As NVIDIA (NASDAQ:NVDA) garners attention with Benchmark's updated price target, InvestingPro data and tips offer additional insights into the company's financial health and market position. InvestingPro data shows NVIDIA's market capitalization stands at a robust $2340.0B, reflecting its significant presence in the industry. With a high P/E ratio of 78.03, the company is trading at a premium, which is supported by its exceptional revenue growth of 125.85% over the last twelve months as of Q4 2024. This growth is further exemplified by a quarterly revenue increase of 265.28% as of Q4 2024, indicating a strong upward trajectory.

From an operational standpoint, NVIDIA's gross profit margin of 72.72% showcases its ability to maintain profitability, while its operating income margin of 54.12% suggests efficient management and potential for reinvestment in growth opportunities. InvestingPro tips highlight that analysts predict sales growth in the current year, and the company is trading at a low P/E ratio relative to near-term earnings growth, which may indicate an attractive investment opportunity for those looking at future earnings potential.

Moreover, NVIDIA has maintained dividend payments for 13 consecutive years, demonstrating its commitment to shareholder returns even as it invests heavily in innovation and market expansion. To explore further InvestingPro tips on NVIDIA and gain more in-depth analysis, investors can visit InvestingPro's NVIDIA page, where 22 additional tips are available to help inform investment decisions. For those interested, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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