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Nvidia's recent data center demand surge is 'unique and sustainable' - BofA

AuthorSam Boughedda
Published 06/07/2023, 01:58 PM
Updated 06/07/2023, 02:30 PM
© Reuters. NVIDIA's (NVDA) recent data center demand surge is 'unique and sustainable' - BofA

BofA reiterated Nvidia Corporation (NASDAQ:NVDA) as one of its top picks after "solid meetings" with the company's CFO and head of gaming.

The firm has a Buy rating and $500 price target on the stock, and told investors that the meetings reassured them that NVDA's "recent surge of demand in data center is unique and sustainable, with no evidence of pull-ins or customer/regional concentration risk."

"NVDA's market share in AI inference has solid headroom as compute requirements in large language models are well above what traditional CPU can handle (currently 90%+ share of legacy inference)," the firm said, adding there are underappreciated opportunities for NVDA to expand its market from just AI accelerators into high-performance CPU, data processing and Mellanox Infiniband + Ethernet networking.

Elsewhere on Wednesday, JPMorgan reiterated an Overweight rating on NVDA, stating the company has "multi-quarter visibility in its data center business, combined with strong automotive and gaming trends."

The analysts also said they are optimistic about the demand from China, while Nvidia's supply/demand situation "looks good."

Latest comments

demand from china will be flat until - Rus/Ukr war is resolved and china shows it will play nice - while AI will balance losses from coin mining - until economy recovers expect it to be flat to down trend given the super high valuation - 200 PE is supper high especially when you compare it to say apple who have gone into the chip bus. and every other high end tech market - one trick ponies are always vulnerable to disruptors
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