Will financial commentators be running out of superlatives for Nvidia (NASDAQ:NVDA) soon? Outstanding. Exceptional. Unstoppable. All or variables have been used to describe the latest beat-and-raise quarterly readout from the chip giant.
Rosenblatt’s Hans Mosesmann, a 5-star analyst rated in the top 1% of the Street’s stock pros, adds another fitting description to the list. “Nvidia once again delivers an epic print and guide as gen AI and accelerated compute trends develop unabated,” Mosesmann said following the semiconductor firm’s fiscal third quarter results that once again beat expectations across the board.
Nvidia’s remarkable success in selling its AI chips has propelled its shares up by an astounding 227% year-to-date. However, none of those gains were recorded post the latest blowout earnings, with apparently satiated investors sending shares down consequently. The culprit: commentary about an anticipated hit to China revenues due to the restrictions placed on the sale of high-end chips to the superpower from the East.
However, that is not that big of a problem, says Mosesmann. “Even with the company’s China AI business, which is 20% – 25% of Data Center revenue, basically becoming irrelevant due to the new U.S. export restrictions, the company’s non-China revenue is more than compensating for this loss,” he opined.
The other good stuff includes the Grace Hopper super chip, already being earmarked as a multi-billion-dollar business next year. In networking, the company’s Bluefield DPU, Spectrum switches, Ethernet (for enterprise), and Infiniband (for AI) are by now on a “$10 billion sales trajectory.” Moreover, with the new AI Foundry business in tow, the Software and Services segment is currently on a $1 billion run rate per year.
As such, with so much to look ahead to, Mosesmann raised his 4QFY24 sales and adj. EPS estimates. These climb from the prior $16.5 billion and $3.33, respectively, to $20 billion and $4.45. Likewise, For the full-year 2024, the forecast rises from the respective $53.2 billion and $10.44 to $58.8 billion and $12.26.
Looking further ahead, Mosesmann is extremely positive, seeing “unconstrained calendar 2025 (now effectively the out-year) EPS approaching the high-$20s.”
All this underlines the fact Nvidia remains the analyst’s “top conviction idea” as Mosesmann reiterated a Buy rating and Street-high $1,100 price target. That figure makes room for further gains of 130% from current levels. (To watch Mosesmann’s track record, click here)
Mosesmann’s buoyant outlook for NVDA is no anomaly on the Street. The stock has a Strong Buy consensus rating, based on 30 Buys and 3 Holds. Going by the $661 average target, the shares will deliver returns of ~39% in the year ahead. (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.
