TD Cowen said Nvidia will likely maintain strong growth in the data center industry in the coming years. But some analysts are skeptical.
The fervor around Nvidia shows no signs of abating, with the chip giant reporting another quarter of growing revenue.
The company, which had already recorded a 200% increase in 2023, rose further by 13% following the presentation of its earnings report. This year alone, it has grown by about 58%.
But how far can Nvidia go? Here’s what the analysts say.
Citi says Nvidia is poised to deliver higher-than-expected graphics processing units for artificial intelligence both this year and next.
The bank raised its price target for Nvidia to $820 from $575.
Ray Wang, Constellation Research analyst, told that “we haven’t reached peak Nvidia yet.” “They have a 90% share of the AI chip market… with an 18-month backlog of GPUs yet to be delivered,” he adds, noting that companies “still want their GPUs from Nvidia” despite the alternatives on the market.
Jeff Pu, general manager of equity research at Haitong International, says it’s not too late to take advantage of Nvidia’s boom, raising his price target to $950.
“We believe the data center infrastructure momentum will continue over the next one, two or three years,” he said, highlighting increased demands for GPUs and strong demand from enterprise customers in 2025 and 2026, particularly Apple.
TD Cowen said in a Feb. 21 note that the company will likely maintain strong growth in the data center sector in the coming years. GPUs are widely used in data centers, which will benefit from the enormous computing power needs of AI. Nvidia itself has a thriving data center business.
“We continue to believe that the industry is only at the beginning of two paradigmatic transformations toward accelerated computing and generative AI, with NVIDIA firmly positioned as a leader in both,” he wrote.
In a Feb. 22 note, BofA said data center sales growth is "robust" and product launches in the year ahead are "capable of supporting strong growth" through 2025. It said raised his price target for Nvidia from $800 to $925.
But there have also been those who show more caution about Nvidia’s prospects.
Gil Luria, general director of D.A. Davidson, recognized that the opportunity in the data center industry is considerable. But while giants like Microsoft, Amazon, Google, and Meta are building this “massive infrastructure around AI,” they have “no need to do it again” once they complete the implementation process.
It also highlighted the increased competition that Nvidia faces, with Amazon, Alphabet, and Meta having their chips, or with tech players supporting AMD and Intel in developing their chips to replace Nvidia.
Luria has a Neutral rating on Nvidia, assigning it a price target of $410, implying a 47% downside.
Original article published on Money.it Italy 2024-03-10 07:10:00. Original title: Perché non tutti gli analisti si fidano della crescita di Nvidia?
