Nvidia price target raised to $740 from $650 at KeyBanc

KeyBanc raised the firm’s price target on Nvidia (NVDA) to $740 from $650 and keeps an Overweight rating on the shares. The firm’s quarterly supply chain findings were mixed. Broad-based end-demand trends remain weak, as auto and industrial end markets undergo inventory destocking; PCs are bouncing along the bottom, while Android smartphone demand is sustaining with Apple’s (AAPL) iPhone seeing weakness in China. Finally, traditional server is weak, while AI remains strong despite crosscurrents. KeyBanc sees mixed implications given indications that the company is lowering its AI forecast in the second half of 2024. However, the firm believes this is in part due to a desire to diversify its CoWoS capacity. Despite the reduction, Nvidia’s AI capacity is well in excess of Street estimates and enough to support over $100B in data center revenues in CY24.