Nvidia shares rose in early trading Monday and could soon test their March all-time high, as analysts rush to alter their price targets for the world's top ai chipmaker ahead of its highly anticipated earnings report. first quarter earnings later this week.
NVIDIA (NVDA) which last year kicked off the current ai revolution in the market with an impressive revenue forecast linked to a surge in demand for its flagship H100 processors, has added more than $1.5 trillion in market value in the last 12 months and is one of the best performing stocks of 2024 with a gain of 88%.
Analysts expect the chipmaker, which also provides semiconductors for the gaming and automotive industries, to post net income of $13.2 billion, or $5.63 per share, for the three months ended in April.
This is a five-fold increase from the prior-year period and likely reflects a gross profit margin of around 77%, up 10 percentage points from the same period last year.
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Meanwhile, the group's revenue is estimated at $24.6 billion, triple last year's first quarter total, and quarterly sales are expected to surpass the $30 billion mark by the end of the current financial year, which ends in January.
Nvidia: data center revenue increases
Data center revenue, the group's largest top-line contributor, is forecast to reach $21.26 billion, an increase of 400% over last year.
Gaming revenue is estimated to be 20% higher, to $2.68 billion, while auto revenue is projected to be largely stable at $296.4 million.
“Once again, an increase/rise is widely anticipated, and investors' focus is likely to remain on the medium-term sustainability of the acceleration of ai infrastructure investment,” said Stifel analyst Ruben Roy, who He raised his price target on Nvidia by $175 to $1,085 per share.
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“Our supply chain checks continue to indicate a strong demand environment for H100/H200, even as enthusiasm around Blackwell continues to grow,” he added, referring to the group's new line of ai graphics processing units, which is expected to hit the market. later in the year.
Roy has a “buy” rating on the stock.
Nvidia's pricing power in the spotlight
Barclays analyst Blayne Curtis, who added $250 to his Nvidia price target, taking it to $1,100 per share, also believes the pricing power of the group's H100 and H200 GPU offerings will boost sales in the near term. .
“In total, controls continue to point to (more than) $1 billion of increases in April and $2 billion in July,” Curtis and his team wrote. “We believe the company can realize incremental revenue due to the pricing of the H200, which will begin shipping in the July quarter.”
“Looking ahead, the next big revenue increase will be the launch of the GB200,” said Curtis, giving a 'neutral' rating on the stock.
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“The company spoke very positively about moving the total mix towards the full GB200 solution for hyperscalers, and we do not believe this mix change will be fully appreciated,” he added.
The Blackwell GB200, a more expensive series of ai-focused processors, performs ai tasks at more than twice the speed of Nvidia's current H100 and H200 chips, while using less power and providing greater custom flexibility.
Nvidia Blackwell platform to improve prospects
Analysts see the potential for an average selling price about 40% higher than the current range for the H100 chips, which cost between $30,000 and $40,000 each.
In fact, Baird analyst Tristan Gerra insists that “there is no rival to Nvidia's product offering this year and next, which, combined with reduced delivery times, should do well in the second half of the year from a market share point of view.
Gerra raised his Nvidia price target by $150 to $1,200, while also raising his GPU unit shipment forecast for this year and next. It has an “outperform” rating on the stock.
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Morgan Stanley analyst Joseph Moore, who remains overweight Nvidia with a $795 price target, recently said Blackwell's launch puts more distance between the tech giant and its chipmaking competitors.
Nvidia CEO Jensen Huang described Blackwell as “the name of a platform… not a chip” and the group sells it as part of a larger stack of servers and chips that make up a system called NVL72.
Related: Analysts review Nvidia stock price targets ahead of earnings
“Enthusiasm for NVL72 is critical to the growing enthusiasm among investors for growth next year,” Moore and his team wrote in an update published Monday.
“Each of the last two quarters, Nvidia has exceeded initial revenue guidance by (approximately) $2 billion and forecast an increase of about $2 billion; we expect something similar later this week.”
Nvidia shares rose 1.2% in premarket trading to indicate an opening price of $937.00 each, a move that would extend the stock's one-month gain to about 18%.
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