The bulls are out in full force for Nvidia (NASDA:NVDA) lately. Ahead of the chip giant’s fiscal second-quarter of 2024 (July quarter) report due next Wednesday (August 23), Street analysts have been lining up to sing the AI leader’s praises.
Rosenblatt analyst Hans Mosesmann has just joined the chorus and he is as effusive as they come.
“NVDA remains one of our top plays as the company stands in a league of its own when it comes to software and AI solutions,” the 5-star analyst said. “With unmatched strengths in compilers, libraries, and vertical optimizations, NVDA can overcome hardware specification challenges and drive recurring software revenue streams. While early innings, we view NVDA as a high-conviction story thriving amid uncertainty given secular AI, autonomous driving, and metaverse tailwinds.”
That’s a pretty resounding endorsement, and like many others, Mosesmann is anticipating a beat-and-raise display where the only element limiting growth is a lack of supply to meet the ravenous demand.
“Severe constraints” on the H100 Hopper platforms, with demand set to exceed supply by at least 50% over the coming quarters, are why Mosesmann sees earnings for FY25 (CY24) at around $10.35 rather than in the high teens. Not for long, though. Boosted by a “multitude of growth vectors: Hopper, Grace Hopper CPU/GPU, Hopper Next, Mellanox tie-in’s (switches, DPUs, NICs, etc.),” Mosesmann expects FY26 (CY25) earnings power to move “well into the $20s.”
As for the raw numbers, Mosesmann’s expectations are in the same ballpark as the Street/guide. He sees July revenue at $11 billion (Street is at $11.1 billion, while Nvidia’s guide is around $11.0 billion +/-2%). On the bottom-line, Mosesmann has adj. EPS of $2.04, a little under consensus at $2.07.
Accounting for a constrained environment, off the back of the higher July quarter sales level, Mosesmann reckons the revenue guide for FQ3 (October quarter) will be “supportive of single digit growth.”
Bottom-line, all of these developments merit a price target hike. Mosesmann’s objective moves from $600 to a Street-high $800, suggesting the shares will gain an additional 84% over the next 12 months. (To watch Mosesmann’s track record, click here)
Overall, Wall Street is in agreement with the bullish perspective. The 34 recent analyst reviews include 32 Buys and 2 Holds, for a Strong Buy consensus rating. While more conservative than Mosesmann’s projection, the average price target of $521.77 still implies a 20.5% upside potential for the next 12 months. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
