Hardly a day goes by without a Wall Street analyst setting a new, higher price target for Nvidia (NASDAQ:NVDA), and Monday is certainly no exception.
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The latest to hop on this bandwagon is Truist’s William Stein, a 5-star analyst ranked in 14th spot amongst the thousands of Wall Street’s stock pros, who cranked up his price target on NVDA from $911 to $1,177. (To watch Stein’s track record, click here)
Behind Stein’s upgrade is a simple message: “NVDA is ‘the’ AI company,” says the 5-star analyst. “Its leading position in parallel compute & AI is owing less to its chips and more to its culture of innovation, ecosystem of incumbency, and massive investment in software, services & models.”
Moreover, the feedback Stein is getting from industry contacts shows that demand for the chip giant’s products will keep on growing to stronger through 2024 and 2025. In fact, offering a resounding counter to the main bear thesis that stipulates a cyclical downturn is coming in 2025, Stein notes that “demand indications for product builds have appeared to accelerate.”
Moreover, Stein says that near-term demand for NVDA’s datacenter products appears to be extremely robust, highlighting the popularity of its CPU-GPU combination product Grace-Hopper. Stein believes Nvidia’s recent excellent datacenter results have been primarily down to its “traditional” Hopper GPU architecture (H100/200s and HGX systems making use of X86 CPUs). The Grace-Hopper, however, replaces the X86 CPU with Nvidia’s own CPU. This is an indication, says Stein, that Nvidia’s share of the bill of materials (BoM) of its products will probably keep on expanding, thereby countering another bearish thesis that suggests that over the coming quarters, Nvidia will lose BoM share.
As such, Stein has raised his CY24 datacenter growth forecast to 108% (from 89% beforehand) and in CY25 from the prior 13% to 28%.
While Stein still thinks Nvidia represents the best investment as far as AI in the datacenter is concerned, he also brings investors’ attention to the opportunity available in AI at the Edge – i.e., AI inference tech deployed in edge devices (such as PCs, smartphones, autos, industrial equipment, & consumer devices) – a “less well understood” market for which Stein expects Nvidia will be “an important vendor.”
Like Stein, most of his colleagues remain NVDA bulls, with the ratings breaking down 39 to 2 in favor of Buys over Holds, all resulting in a Strong Buy consensus rating. However, the $913.74 average target suggests the shares will remain rangebound for the time being. It will be interesting to see whether other analysts raise their targets should Nvidia keep up the current momentum. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
