After the Earnings Report exceeded expectations, the "most optimistic bull" set a target price of $1100, predicting that NVIDIA will double its value!

NVIDIA's better-than-expected Q2 report validates the correctness of artificial intelligence and gives analysts confidence to remain bullish.

On Thursday, Wall Street bank Rosenblatt raised its target price for NVIDIA's stock to $1100 and reiterated a buy rating, setting a new high for Wall Street analysts' valuation of NVIDIA.

With a stock price of $1100, there is still a 133% upside potential compared to NVIDIA's Thursday closing price of $471.63.

Just a week ago, Rosenblatt raised NVIDIA's target price from $600 to $800, the highest point on Wall Street. At that time, analyst Hans Mosemann believed that although NVIDIA could not meet all the strong demand for its GPUs and other products, its Q2 report was expected to exceed expectations, and there was further room for NVIDIA's stock price to rise.

Mosemann wrote in the report that NVIDIA's AI growth story is "the mother of all cycles":

NVIDIA has achieved epic performance for two consecutive quarters, which is unprecedented and has just begun.

Tactically, with expected supply growth every quarter, the $16 billion quarterly guidance in October will continue to grow until 2024.

Rosenblatt emphasized the comments of NVIDIA CEO Jensen Huang, who reiterated his view during the conference call that NVIDIA is focusing on the $1 trillion data center opportunity because most data centers are shifting from general computing to accelerated computing for AI model generation.

With the tremendous opportunities in data centers and AI inference, as well as the majority of the $1 trillion server market shifting to accelerated computing, Nvidia will experience years of growth.

Edge AI, automotive, enterprise, networking, and software are just additional benefits.

Analysts also pointed out the supply-side issues NVIDIA is facing, suggesting that NVIDIA will be constrained in the short term. However, they predict that these constraints will be lifted by 2025, thereby improving the company's earnings per share capability, which is not reflected in the current valuation and provides a reason for raising the stock price target.

Our forecasts have been raised, but we see NVIDIA being constrained in GPU computing for most of 2024. From a valuation perspective, we expect earnings per share to reach around $20 in 2025, which is a high level.

On Wednesday, NVIDIA released its Q2 earnings report, with revenue doubling YoY, exceeding expectations by 22%, and EPS profit growing more than four times YoY, higher than expected by nearly 30%. Q3 revenue guidance is $160±2 billion, a 170% YoY increase, higher than expected by 28%. This kind of rapid growth is not sustainable indefinitely, but Nvidia strongly hinted on Wednesday evening that its rise is far from over.

Colette Kress, Nvidia's Chief Financial Officer, stated during the company's earnings conference call that "demand visibility" will continue into next year and expects to improve chip availability in the coming quarters.

Huang Renxun later told The Wall Street Journal in an interview:

Our shipments have not come close to meeting demand.