Off the back of a couple of monster earnings reports, the Street is readying for another quarterly readout from Nvidia (NASDAQ:NVDA). The chip giant will take center stage on Tuesday (November 21), when it will deliver its fiscal third quarter of 2024 (October quarter) results.
According to Goldman Sachs analyst Toshiya Hari, another investor-pleasing statement is on the way. “We expect strong FY3Q results and FY4Q guidance as well as constructive forward-looking commentary from management to reinforce our bullish view on the stock,” the 5-star analyst said.
Armed with its superior Data Center products, Nvidia has made the most of the 2023 AI revolution and Hari anticipates that the print and FY4Q (January) outlook for the company’s core Data Center segment will “illustrate the ongoing shift in wallet share away from general-purpose compute (i.e. CPU) in favor of accelerated computing (i.e. GPU).”
A look at how expectations for Nvidia have changed on the Street this year is quite telling. year-to-date, the analysts’ anticipated revenue for Nvidia’s Data Center segment in 2023 has surged by 122%, rising from $18 billion to $39 billion. In contrast, the revenue expectations for AMD’s Data Center segment have dropped by 20%, declining from $8.2 billion to $6.6 billion, and so have expectations for Intel’s Data Center & AI segment, which have experienced a 14% decrease, falling from $18.3 billion to $15.6 billion.
While Hari anticipates a slowdown in the speed at which the transition to accelerated computing is occurring and foresees a modest increase in 2024 of spending on traditional computing, especially among cloud hyperscalers, he projects that accelerators will “continue to gain share over the medium- to long-run as AI proliferates across various verticals and data center workloads grow in complexity.”
And given its robust hardware and software offerings and, crucially, the speed at which the company keeps on innovating, Hari sees Nvidia holding on to its position as the “industry standard.”
In fact, even with the shares up by 207% year-to-date, Hari highlights Nvidia’s “attractive risk/reward profile,” recommending a Buy rating along with a $605 price target. There’s potential upside of 24% from current levels. (To watch Hari’s track record, click here)
36 of Hari’s colleagues join him in the bull camp, thoroughly outgunning the Street’s lone skeptic, and all pointing toward a Strong Buy consensus rating. The $648.01 average target suggests shares will climb 31% higher over the coming 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.
