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A shift towards higher-priced processing units could further boost shares of Nvidia , according to KeyBanc. The firm upgraded raised its price target on the semiconductor maker to $750 from $670, implying a potential upside of 67% from Monday’s close. KeyBanc has an overweight rating on the stock. Nvidia has been the posterchild for this year’s artificial intelligence-fueled run, rallying more than 200% in that time. Analyst John Vinh thinks there are signs of more gains coming for the high-flying chipmaker. NVDA YTD mountain NVDA ytd chart “We are seeing improving demand trends in smartphones, where multiple supply chain partners are seeing rush orders, and in PCs, where 3Q PC shipments are slightly better. Automotive demand remains strong more broadly and in particular within Evs, with growth expected to track to 10%+ growth in 2023,” he wrote. Although near-term supply remains tight for Nvidia, Vinh still sees moderate upside to the firm’s estimates given capacity expansions and strong demand for its L40S graphics processing unit, or GPU. The latter could contribute between $2.5 billion to $3 billion to Nvidia’s revenues in the second half of 2023. Additionally, Nvidia’s shift towards the higher-priced H100 GPU, priced at $25,000, versus the $12,000 price of its A100 system should also spell better baseline growth. “Longer term, we see more meaningful capacity coming online in 2H24, as well as continued outsized growth as NVDA looks to pull in the ramp of its next generation GPU, the B100, into 4Q24,” Vinh noted. — CNBC’s Michael Bloom contributed to this report
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