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Tisdag Mar 12 2024 15:28
4 min
Despite a significant recent drop in Nvidia stock, with NVDA marking its most substantial decline in nine months on Friday, Cantor Fitzgerald analyst C.J. Muse remains optimistic.
Over the weekend, Muse raised his price target for Nvidia stock from $900 to $1,200, ahead of the company's annual GTC conference. He believes the event will highlight Nvidia's growth opportunities — including its less visible business segments.
Muse's updated target is one of the highest on FactSet, suggesting a 37% potential increase from the current stock price. He points out that Nvidia's software division has reached a $1 billion annual run rate, a modest figure compared to the company's $60 billion revenue last fiscal year, with expectations to surpass $100 billion this year.
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Muse also said that Nvidia's software business "is only in the [first] inning”, with significant focus expected at the GTC conference on its expansion, particularly in making AI more accessible through its AI Enterprise solution.
He also anticipates a spotlight on inference applications in AI, noting the surprising demand for Nvidia's data-center GPUs for inference tasks.
He mentioned that a revelation from Nvidia took many on Wall Street by surprise: over the past year, at least 40% of the demand for data-center GPUs stemmed from inference. However, looking back, this could make sense given Meta Platforms’ and Microsoft’s pushes there.
Inference in AI refers to systems making predictions on data that is new to them. Muse added:
“We continue to expect NVIDIA to surprise to the upside with its share of the inference market”.
The GTC event is likely to see the unveiling of Nvidia's latest data-center chip, the B100, anticipated to double the performance of its predecessor, the H200. Muse is keen to see how Nvidia's existing customers will transition from their current A100 and H100 setups to the new B100 chip.
He expresses enthusiasm for Nvidia's revenue and earnings prospects, suggesting the GTC could reveal a solid product roadmap through 2024, support for growth into 2025 with new products like the B100, and the potential to capitalize on the burgeoning generative AI market.
Muse speculates that 10% to 15% of servers could be equipped with Nvidia's technology by 2025, potentially justifying a fair value between $1,200 and $1,400 “once investors gain conviction 2025 is not a peak year”.
Nvidia stock was last up 2.2% on March 12, trading around the $875.76 mark. The shares have gained 77% year-to-date, and more than doubled their value over the past 12 months. Nvidia’s stock has gained an eye-watering 260% since mid-March 2023.
The company’s gains have eclipsed that of the benchmark S&P 500 index, which has risen by 8% year to date and over 31% over the past year.
When considering shares and indices for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.
Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.
When considering shares, indices, forex (foreign exchange), and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.
Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.
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