Nvidia (NASDAQ:NVDA) has no plans to take its foot off the gas pedal. While its Hopper chips remain in high demand, the AI chip giant is operating at full steam to launch its next version, named after the renowned mathematician David Blackwell.
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Although the Blackwell architecture initially faced some yield, design, and production issues, the company appears to have ironed out these kinks. Production of Blackwell GPUs is now fast and furious, with close to 13,000 units delivered to customers during the last quarter.
One top investor, known by the pseudonym Research Wise, expects Blackwell to help Nvidia remain front and center going forward.
“As Blackwell has also started to ramp up, the company should experience significant volume growth in the quarters ahead, leading to topline expansion,” explains the investor who sits in the top 4% of TipRanks’ stock pros.
Research Wise highlights Blackwell’s enhanced capabilities, including improved operating efficiencies and energy savings, which are actively attracting customers far and wide.
“In my view, these cost-saving features of the company’s next-generation solutions, combined with their ability to accelerate business operations and automate workflows, should result in robust demand growth from corporations and AI-based startups,” the investor opined.
Expecting greater AI and computing technologies to remain in high demand, Research Wise believes there will be plenty of appetite for Nvidia’s GPUs and technological solutions.
“The anticipated volume growth should deliver strong operating income growth in the quarters ahead, leading to bottom-line expansion beyond FY25, which should help the company in enhancing its valuation in the future,” notes Research Wise.
On that note, Research Wise acknowledges that NVDA is trading at a significantly higher multiple (Forward P/E of 46.64x) than both the sector median (25.42x) and its peer group of AMD (36.56x), AVGO (37.38x), and QCOM (14.74x). However, the investor also notes that NVDA has experienced a remarkably fast appreciation of 20x returns during the last five years, while outperforming the competition. In other words, Nvidia has earned its premium.
Concluding that current levels represent “a decent opportunity to invest in this long-term compounder,” Research Wise rates NVDA shares a Buy. (To watch Research Wise’s track record, click here)
One won’t find much disagreement among Wall Street analysts. With 36 Buy and 3 Hold recommendations, NVDA shares boast a Strong Buy consensus rating. Their 12-month average price target of $176.86 implies ~21% upside for the year to come. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
