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'Cosmological', 'Just wow', 'Mother of all cycles': Analysts discuss Nvidia as shares rally 25%

Published 05/25/2023, 05:49 AM
Updated 05/25/2023, 05:49 AM
© Reuters -- Nvidia (NASDAQ:NVDA) shares skyrocketed in premarket Thursday trading after the chipmaker offered a blockbuster outlook for the second quarter.

The company's fiscal first-quarter results easily topped analyst estimates. Nvidia shares are up 25% in premarket trade on Thursday following the report.

Nvidia announced earnings per share of $1.09 on revenue of $7.19 billion. Analysts polled by anticipated EPS of $0.92 on revenue of $6.52B.

First-quarter revenue in its data center business reached a record $4.28B, up 14% from a year ago and up 18% from the previous quarter. That helped offset weakness in its gaming business, with revenue down 38% to $2.24B from a year ago, but still better than what the Street was expecting.

“A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process," the company said.

“Our entire data center family of products — H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand and BlueField-3 DPU — is in production. We are significantly increasing our supply to meet surging demand for them,” it added.

Looking ahead to fiscal Q2, the company guided revenue in a range of $11.00B, plus or minus 2%, crushing the Street expectations for $7.13B.

The chipmaker is experiencing a massive boost to chip demand from growing interest in artificial intelligence (AI). CFO Colette Kress said on the earnings call that demand for high-end chips "has extended our data center visibility out a few quarters, and we have procured substantially higher supply for the second half of the year."

Following a massive beat-and-raise quarter, Wall Street analysts are sharply raising numbers on Nvidia. Baird analysts upgraded the stock to Outperform.

Rosenblatt analysts nearly doubled the price target to a new Street-high of $600 per share after an "epic print and guide."

"Nvidia’s epic print and guide on the massive inflection of global generative AI is historical on so many levels and consistent with a needed view that there is a secular change in semiconductor growth ahead. We call this the Mother of All Cycles or MOAC," they said in a note to clients.

Bernstein analysts also hiked the price target, going to $475 from the prior $300 per share.

"In the 15+ years we have been doing this job we have never seen a guide like the one NVDA just put up with FQ2 outlook that was by all accounts cosmological, and which annihilated expectations," they said.

With shares up 109% year-to-date through Wednesday's close, the analysts also discussed what investors should do with Nvidia stock at current levels.

"Everyone has been looking for ways to play AI that aren't as expensive as NVIDIA given the run this year. However, perhaps NVDA itself is the best way to accomplish that (while still undeniably pricey it is clearly not quite as expensive as it looked) and the narrative, backed up by actual products and sales, still has legs in our opinion."

(Additional reporting by Senad Karaahmetovic)


Latest comments

Absolutely terrific numbers but the valuation of the company has got too carried away and needs a cooling off period. Definitely a stock that should be in everyones portfolio though
Low ball estimates by a medium sized company. Where are the chips made?
is a $900b (market cap) company still considered mid-sized?
They have a manufacturing plant in Arizona. They are expanding it thanks to legislation signed by Biden.
Nah when crypto fails tons of extra chips everywhere…
You know market's gonna collapse when analysts speak and act like crypto moonbois. Happens EVERY. SINGLE. TIME. before major correction. Just look at all the analysts posts and comments for last few weeks nad now even accelerating, while existing reality going the other way. But keep on rolling the ball boys lol.
God forbid these "reporters" should add any additional context beyond their stenography. Pertinent to American readers will be NVIDIAs tripling of its Arizona manufacturing plant thanks to the bipartisan CHIPS act signed into law by President Biden.
Currently, Taiwan Semiconductor Manufacturing Co. (2330.TW) builds the bulk of Nvidia chips .
It's a good thing for the U.S. then that they are on-shoring more of their manufacturing.
If I were president, I'd have Nvidia move to the southern US, with a ten year tax holiday. I'm reading this on an RTX Quadro M4000 Nvidia GPU. Pulled from a 2011 Tesla desktop supercomputer-it works....way better than the $3000 plastic chew toys sold to gamers.
Will Arizona do?
"If I were president, I'd have Nvidia move to the southern US, with a ten year tax holiday."  -- why should a US president favor one region of the country over another?  and why would a US president be giving one company a tax holiday over the other companies, assuming you even have the authority?
Why don't the Rep and Dem let Nvidia decide the debt ceiling and appoint AI as the next Prez ...
Artificial intelligence would be better than no intelligence, which is what we have now!
Nvidia the saviour of US more recession, inflation and debt ceiling fear ..
it's going to 550
I feel sorry for all you chumps
I hope once just bubble pops, all these analysts offering ridiculous price targets get investigated by the doj and sec like the banks sort sellers are market manipulation works both ways
Made a comment hours ago and of course it was taken down by the nAzI patrol
I’ve owned thus hum-dinger since 2013. It’s been a surprising and satisfying decade with NVDA…it’s expensive now. Maybe sell some, buy some UPST and will report back in 2033.
don't bother
Soxl calls tomorrow
Sell me wi. ves shorts 🍑🍑
it is an scam who's buying? sales are dropping worldwide! Lol!
Here only the comments, where most of the common sense can be found.
Ponzi scheme. Just line Enron
Chad richer is definitely poorer than you
Why are so many negative comments? Did they all miss the boat?
 Well short sellers - or people who dont want to overpay for a bubble which AI is at the moment. Nvidia share price is up almost 400% in a little over 6 months!!!! Plus almost 800% since pre covid. Is the potential for AI huge? Yes...but that potentially has largely been baked into the share price now while 0 of the risks have been accounted for as most are getting stuck in FOMO. Can see Nvidia rise for another 6-12 months but then fall back to $200ish once hype dies down
Short cellars, America haters, anticapitalists and apologists for repressive regimes.
Last time it popped this way it came right back down. Its all AI hype. Earnings actually decline overall
With all these companies doing so good, I would expect a rate hike next FED meeting.
glad to see their gaming division is failing due to the ridiculous product releases
this is the next pump And dump candidate. will drop hard when the time comes
it's not just a candidate, it's next pnd. never has any company been even near overpriced.
Absurd beating expectations while floundering everywhere else for the most part... EARNINGS ARE A TOTAL JOKE THESE DAYS!
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