Zhitong
2024.05.15 13:28
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Another investment bank is optimistic about NVIDIA's performance! KeyBanc: Performance and guidance will exceed expectations

KeyBanc Capital Markets has set Nvidia's target stock price at $1200, expecting its quarterly performance and guidance to exceed expectations. Analysts believe that the improvement in H100 GPU supply, increased demand for H20 GPU in China, and the initial supply of H200 GPU are the main factors driving performance higher. In addition, the launch of the Blackwell series chips is expected to contribute to data center revenue growth. Wells Fargo also raised Nvidia's target price, predicting significant growth in its data center business. Looking ahead to Nvidia's upcoming earnings release, the market is generally optimistic

Intelligence from Zhitong Finance revealed that KeyBanc Capital Markets has set Nvidia's target stock price at $1200. Nvidia is set to announce its quarterly earnings on May 22nd, with analysts from the investment bank suggesting that the current performance and guidance may be boosted by several factors. These include better supply of the H100 GPU, strong demand for the H20 GPU in China, and the initial supply of the H200 GPU.

Analysts noted that the current products of Nvidia have not been significantly affected by the high expectations for their Blackwell series GPUs. They also believe that in the long term, the Blackwell series chips (scheduled to be launched in the second half of this year) may help grow data center revenue to over $200 billion.

Analysts generally expect the upcoming first-quarter revenue to be $24.47 billion, with earnings per share of $5.56. Analysts led by John Vinh wrote in an investor report, "Despite the expected launch of the next-generation Blackwell GPU in the second half of the year, we see limited signs of demand pause, expecting Nvidia to announce significantly better-than-expected first-quarter earnings and second-quarter guidance. We believe the earnings have a favorable risk/reward, hence maintaining a (hold) position."

Analysts stated, "The B100 (alternative to H100) and B200 are expected to ramp up from the third quarter and may account for a significant portion of fourth-quarter GPU sales, with an (average selling price) of over 40% higher than Hopper. Coupled with the supply of H200, we anticipate a smooth transition between Hopper and Blackwell, with both product lines contributing to 25 years of growth."

Not only does KeyBanc have a positive outlook on Nvidia's upcoming earnings, another investment bank also expressed optimism this week. On Tuesday, Wells Fargo raised Nvidia's target price, stating that its data center business could see significant growth. The bank's analysts raised Nvidia's target price from $970 to $1150. Looking ahead to the first quarter of the 2025 fiscal year (earnings to be announced next week), analysts believe Nvidia's Q1 data center revenue will reach $20.6 billion, a 380% year-on-year increase.

Analysts led by Aaron Rakers wrote in an investor report, "We believe (within the quarter) demand data points, shortened delivery time of H100 GPUs (by about 10 weeks), combined with the initial shipment of H200, cloud capital expenditures, and expanding efforts in Sovereign AI, all indicate another strong growth driven by data centers."

Wells Fargo analysts also raised their expectations for data center spending in the next three fiscal years, projecting data center spending to reach $93.2 billion, $126.4 billion, and $151.4 billion in 2025, 2026, and 2027 respectively Analysts say that Taiwan's export data has always been "highly correlated" with NVIDIA's data center revenue; and in the three months ending in April, export data increased by 360% year-on-year and 33% month-on-month. Analysts also point out that the increased spending of mega-scale enterprises such as Meta (META.US), Microsoft (MSFT.US), Google (GOOGL.US), and Amazon (AMZN.US) cloud service AWS indicates a positive trend.

Analysts further predict that NVIDIA will announce "InfiniBand performance in line with expectations/stronger than expected", with software revenue expected to reach $2 billion annually by the end of this fiscal year, thanks to AI enterprises that spend $4,500 per GPU annually