Nvidia earns a vote of confidence for its long-term commitment to new artificial intelligence applications, despite slowing sales of new game cards.
KeyBanc Capital Markets analyst John Vinh reiterated his “overweight” rating on Nvidia (NYSE:NVDA) stock, raising his price target from $320 to $375.
“NVIDIA remains uniquely positioned within the industry to benefit from the long-term data center growth of AI/ML,” Vinh wrote on Sunday. “It’s been a disappointing release.” [gaming card] The RTX4070 could be a bit of a flop in gaming, and we expect investors to consider these concerns. ”
In Monday noon trading, the stock rose 0.2 percent to $313.34.
Nvidia chips have been heavily exposed to the trend of the year, generative AI. This technology brute-forces ingesting text, images, and video to create content. Interest in this form of AI was sparked by ChatGPT, which OpenAI released late last year.
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The analyst said NVIDIA will benefit from strong sales from its latest data center H100 product and future game card rollouts. The company is trading at a high valuation of 48 times its earnings forecast for fiscal 2025, which he believes is justified.
“We believe in NVDA’s extraordinary share position and ability to monetize GM’s 70%+ generative AI growth. [gross margin] It should warrant a significant premium over its peers in semiconductors,” he wrote.
Wall Street analysts have a favorable view of Nvidia. According to FactSet, about 74% have a Buy or Equal rating.
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The chipmaker is due to report first-quarter results on Wednesday.
Email Tae Kim (tae.kim@barrons.com).
