🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

NVIDIA target lifted at BofA as AI dominance expected to continue

Published 02/02/2024, 10:11 AM
Updated 02/02/2024, 10:14 AM
© Reuters NVIDIA (NVDA) target lifted at BofA as AI dominance expected to continue

Bank of America analysts raised the firm's price target for NVIDIA (NASDAQ:NVDA) to $800 from $700 per share in a note Friday, reiterating its Buy rating and top pick designation on the stock, noting its "compelling valuation."

Analysts said, ahead of NVDA's earnings report on February 21, that they are looking for a notable but more measured 3% to 5% or $500 million to $1 billion upside to both the reported FQ4 and guided FQ1, mainly due to incremental supply gains offset by China restrictions and some transition effects prior to the B100 accelerator launch planned for the second half of 2024.

"While a 3-5% beat would pale vs. the 10%/22% beat/raise of prior quarters and perhaps disappoint some bulls, the more measured pace will also be seen as creating more fertile ground for continued growth in CY25 and beyond," analysts wrote.

The analysts also stated that artificial intelligence demand is in its infancy and is becoming essential to operations.

It's "early days," they said, but the "results from top US cloud customers suggest a solid motivation for spending in genAI."

"Enterprise genAI adoption has yet to kick off and become more material in CY25, with NVDA benefitting from its widespread availability on public clouds, and unique partnerships with ServiceNow, SAP, VMWare, Dell, HPE and others," analysts added.

BofA expects NVDA to maintain its dominance in AI inference as well. "We forecast the data center AI accelerator market to grow from $43bn in CY23 to over $160bn by CY27E, likely an even contribution from training/inference. We expect NVDA to hold 90% share in training and achieve >50% share in inference. Most of MSFT's AI success thus far has been in AI inference, likely largely on NVDA GPU," the bank explained.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.