Nvidia’s Blowout Profits Boost Market Value By Over $ 800 Billion

If such gains were sustained, it would be a record and bring Nvidia’s market value to around $ 808 billion. Shares are up about 148% year-to-date.

Raymond James analyst Chris Caso raised his price target to $ 365 from $ 225 and maintained a strong buy rating in a note after the results were released on Wednesday.

He wrote that the graphics card maker crushed analysts’ expectations for its fiscal third quarter, while its revenue forecast of around $ 7.4 billion for the January quarter was even better. He says the increasing supply and accelerating demand for data centers are positive signs.

“In the short term, NVDA’s revenue has only been limited by the increased supply and availability of supply – and the increased supply increases revenue,” Caso wrote. “Long-term commitments are aimed at securing an increase in supply going forward, as they prepare for what is expected of very robust data center spending from cloud customers and businesses in the future. 2022. “

The stock had set the bar very high in recent weeks due to the soaring valuation of the company. Investors and analysts believe the metaverse will provide the company with a multibillion-dollar opportunity to supply chips to power the charts of the virtual world.

The company’s open Omniverse platform, where designers and artists can collaborate virtually and create 3D worlds, has sparked even more excitement for the metaverse.

“Longer term, the additional opportunities for Omniverse and software are difficult to quantify as these are brand new markets,” Caso wrote. But he pointed to the artificial intelligence graphics processing units, which have become the basis of a $ 10 billion company for Nvidia. “We know that the potential of these new markets is great and that NVDA has the leadership in these markets. “

Shares are up despite concerns from the US Federal Trade Commission over Nvidia’s acquisition of chip designer Arm. Executives said on the company’s earnings conference call that Arm licensees had expressed concerns about the deal.

Arm licenses its chip designs to large companies such as

Apple

(AAPL) and

Amazon.com

(AMZN), which use chips from cell phones and computer processors. Nvidia CFO Colette Kress said the company was in talks with the FTC to address the regulator’s concerns.

“While NVDA is still planning to complete the acquisition of Arm, the company prefaced its comment by indicating that some licensees have expressed concerns and that regulators are taking a closer look at the deal,” the company wrote on Thursday. Wedbush analyst Matt Bryson. “Once again, we remain more skeptical about the approval of this deal by regulators.”

Bryson maintained a neutral rating and a price target of $ 300. He said the fundamentals of the company were “undeniably great,” but he had qualms with a growth multiple greater than 50 times his earnings estimate for fiscal 2025.

Truist analyst William Stein raised his price target to $ 389 from $ 360 and maintained a buy note in a note following the report. He argued that Nvidia is the leader in semiconductor technology and software for artificial intelligence, which will drive structural growth. This, according to the analyst, justifies a higher multiple.

Oppenheimer analyst Rick Schafer wrote that the company is throwing a vast network into data center AI that supports some of the most dynamic applications, such as image recognition, neurolinguistic programming and the metaverse.

“The GPU was originally used to create graphics for video games and movies,” Schafer wrote, referring to Nvidia’s graphics processing units. “Today, its parallel processing capabilities, supported by thousands of compute cores, are essential for deep learning artificial intelligence algorithms in data centers. “

New Street Research analyst Pierre Ferragu wrote in a note Thursday that the company had seen strong demand in its gaming and data center business, but he sees no short-term catalyst to justify the increase. of its neutral rating and its target price of $ 270.

“We are only buying on a significant drop in inventory and expectations,” Ferragu wrote.

Write to Connor Smith at [email protected]