U.S. Markets closed

Nvidia: Latest Developments Are Breathtaking, Says Top Analyst

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Not content anymore with dominating the GPU market, Nvidia (NVDA) has now set its sights on taking share in the CPU segment. The chip giant hosted its annual GTC developers conference on Monday, and the market liked the company’s latest developments. Shares added ~9% over the past two trading sessions and now sit a whisker from all-time high.

While Rosneblatt’s Hans Mosesmann counts CEO Jensen Huang’s keynote as “impressive in a multitude of AI, HPC, Cloud, Edge, 5G, Industrial, and Automotive areas,” the 5-star analyst thinks Wall Street might still be reeling from Nvidia’s progress and its intention to move into Intel and AMD territory.

“It may take time for the Street to fully grasp what is going on, but make no mistake that Nvidia is again disrupting the AI/ acceleration markets in a way to keep pace with AI model complexity doubling every 2.5 months,” Mosesmann said. “The takeaway is that Nvidia is serious about CPUs and will not be constrained by x86 owned by Intel and AMD. The level of platform innovation is mind boggling and something that silicon competitors will be tasked to match for many, many years to come.”

Until now, Nvidia had stayed out of the CPU market, one in which Intel has been the heavily dominant force (with AMD also taking its share).

Mosesmann says the “CPU hole in Nvidia’s portfolio has been a consistent weak spot or vulnerability to Nvidia’s roadmap longer term.” That has now been rectified.

Nvidia will base its new Project Grace CPU on ARM’s technology and the data crunching unit will boast much higher system bandwidth compared to the x86. Recall, pending regulatory approval, Nivdia is all set to acquire ARM for $40 billion.

The CPU announcement was not the only news greeted enthusiastically by investors on Monday. Revenue for FQ1 appears to be coming in higher than expected; Nvidia had guided for revenue between $5.19 billion and $5.41 billion, but announced it was “tracking above” the $5.30 billion mid-point. Additionally, due to the surging crypto market, Nvidia is raking in additional revenue. Sales from crypto mining chips should hit $150 million, compared to the previous forecast for sales of $50 million.

Overall, Mosesmann rates NVDA shares a Buy along with a $700 price target. This figure implies ~28% upside potential from current levels. (To watch Mosesmann’s track record, click here)

Looking at the consensus breakdown, most on the Street agree. NVDA stock has a Strong Buy consensus rating based on 23 Buys vs. 4 Holds. The forecast is for 6% upside, considering the average price target clocks in at $664.60. (See NVDA stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.