Semiconductor and technology company NVIDIA Corporation
Analysts reacted to the quarter beat and updated guidance from the company.
The NVDA Analysts: Goldman Sachs analyst Toshiya Hari has a Buy rating and raises the price target from $495 to $605.
- Wedbush analyst Matt Bryson has an Outperform rating and raises the price target from $490 to $600.
- Susquehanna analyst Christopher Rolland has a Positive rating and raises the price target from $575 to $600.
- Morgan Stanley analyst Joseph Moore has an Overweight rating and raises the price target from $500 to $630.
- Bernstein analyst Stacy Rasgon has an Outperform rating and raises the price target from $475 to $675.
- KeyBanc analyst John Vinh has an Overweight rating and raises the price target from $620 to $670.
"Nvidia delivered against heightened investor expectations as growing investments in Gen AI infrastructure drove a 21% revenue beat and non-GAAP EPS exceeded Street consensus by 30%," Hari said.
The analysts said Nvidia can have sustained revenue growth through 2024 with strong demand for its Data Center segment and its improving supply backdrop.
Hari notes that competition from large cloud service providers and other semiconductor companies could be coming.
"We expect Nvidia to maintain its status as the accelerated computing industry standard for the foreseeable future given its competitive moat and the urgency with which customers are developing/deploying increasingly complex AI models."
Wedbush on NVDA: Investor and analyst expectations for Nvidia were blown away in the second quarter, Bryson said.
"Results not only substantially exceeded our/prior Street consensus estimates, but once again the company's outlook implies Data Center revenues in CQ3 will grow at a faster rate than even the most ambitious forecasts had anticipated," Bryson said.
The analyst said comments from Nvidia about "substantial" incremental capacity make it hard to predict revenue growth going forward.
"Without having strong insight into these questions or better immediate inputs with which to derive more accurate NVDA revenue estimates, we are choosing to assume what we believe will prove conservative growth rates for NVDA's Data Center business."
Susquehanna on NVDA: High expectations for Nvidia for the quarter and risks around supply constraints were key items in the second quarter for Rolland.
"Going into this print, we had high expectations for Data Center but acknowledged supply risks," Rolland said.
Rolland said Nvidia had "back-to-back miraculous quarters."
Outlook from Nvidia "destroyed estimates" for growth of AI products, according to the analyst.
"Given the tremendous DC (Data Center) beat, we are now comfortable with a $70B DC estimate for 2024. We imagine the buy-side is already at $80B+."
Morgan Stanley on NVDA: The second quarter was "exceptional" for Nvidia, according to Moore.
"Last quarter was the first time in semis history that we saw a company guide revenues $4 bn above consensus, with admittedly higher expectations this quarter," Moore said. "NVDA did it again, with its data center business growing more than 3x in 6 months."
The analyst said data center revenue showed "remarkable growth."
"We knew that our numbers suggesting $1 bn of upside to July and October were potentially on the conservative side, but we were much too conservative for both quarters."
The analyst said that it feels early "in a longer runway" when it comes to Nvidia's growth.
Bernstein on NVDA: Despite high estimates and one of the "most anticipated earnings results" ever seen, Nvidia delivered on revenue and eps, Rasgon said.
"Datacenter sales exceeded $10B, above what we believe were even the more bullish expectation ranges we had heard going into the print," Rasgon said.
The analyst said it was important that Nvidia said its demand visibility extends into next year. The company also said that supply will increase "sequentially" each quarter for the next several quarters.
"Given the sheer magnitude of the datacenter profile, the question of sustainability will likely remain. However, the time to worry is clearly not now."
Rasgon said Nvidia's datacenter opportunity "is enormous, and still early."
KeyBanc on NVDA: The second quarter report from Nvidia lived up to the hype, according to Vinh.
"Supply is expected to increase every quarter through next year, while demand visibility also extends into next year," Vinh said.
The analyst calls Nvidia a global leader that continues to seek diversification in product offerings, which "could drive meaningful growth over the next few years."
NVDA Price Action: Nvidia shares were trading at $477.70 on Thursday, up 1.4%. Shares hit over $500 in after-hours Wednesday and in pre-market trading Thursday, setting new 52-week highs. Nvidia shares are up over 240% year-to-date in 2023.
