In a Tuesday note following NVIDIA Corp. (NASDAQ: NVDA)'s groundbreaking announcements at GTC 2024, Goldman Sachs equity analyst Toshiya Hari provided a bullish outlook for the chipmaker giant, underscoring Nvidia's unparalleled capacity for innovation in the data center space.
The investment bank's robust confidence in Nvidia's trajectory shines through its elevated price target for NVDA shares, now set at an ambitious $1,000 - marking a notable increase from the prior $875 target.
Revolutionizing Data Centers And AI: At the heart of Nvidia's announcements was the introduction of its next-generation Data Center GPU platform, dubbed Blackwell, poised to deliver a staggering up to 4x faster AI training and 30x quicker inference capabilities compared to its predecessor, the H100.
"We expect Blackwell to be the fastest ramping product in Nvidia's history with Amazon.com Inc. (NASDAQ: AMZN), Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG), Meta Platforms Inc. (NASDAQ: META) and Microsoft Corp. (NASDAQ: MSFT) among others to have Blackwell-based products available starting later this year," Hari said.
Expanding Partnerships, Market Reach
Hari's note also highlighted Nvidia's expanding ecosystem, underscored by various partnerships across multiple sectors, including Enterprise Software, Healthcare and Automotive/Robotics. These collaborations, alongside new microservices like NIM and CUDA-X, demonstrate Nvidia's commitment to democratizing AI technology across industry verticals. Such efforts are expected to bolster Nvidia's competitive edge and deepen its market penetration.
"We come away from the keynote with a renewed appreciation of Nvidia's unique ability to innovate at data center scale, large eco-system and breadth of its customer and partner engagements and, ultimately, compelling position as one of the key enablers and beneficiaries of the ongoing build-out of Generative AI infrastructure," Hari wrote.
Financial Outlook And Market Implications
Goldman Sachs has revised its revenue and non-GAAP EPS estimates for Nvidia for FY2026-27 upwards by an average of 10% and 11%, respectively. This optimism is rooted in Nvidia's robust demand and supply dynamics, its pioneering role in generative AI and the strategic introduction of products that promise higher efficiency and lower computing costs.
The acceleration of Nvidia's data center innovations not only cements its competitive edge but also presents challenges for rivals like Advanced Micro Devices, Inc. (NASDAQ: AMD), which "needs to keep up with Nvidia's innovation cycle for it to maintain/extend share in the Data Center accelerator market."
Conversely, the development bodes well for Micron Technologies Inc. (NASDAQ: MU), predicting a positive outlook for the DRAM industry given the anticipated increase in memory density with the Blackwell platform.
Bottom line, Goldman Sachs reiterated a "Buy" rating on NVDA shares with a more bullish 12-month price target of $1,000, up from $875. This adjustment reflects not only the immediate impacts of the GTC 2024 announcements but also a broader belief in Nvidia's capacity to drive and benefit from the generative AI revolution across multiple industries.