Wall Street analysts seemingly can’t get enough of Nvidia . The chip maker earned an adjusted $2.70 per share on $13.51 billion in revenue. That easily exceeded the expectations of analysts surveyed by Refinitiv, who forecasted $2.09 earned per share and revenue at $11.22 All eyes were on the artificial intelligence darling’s report, as investors wondered if the company could meet heightened expectations. Nvidia has already soared more than 200% this year, making it the top performer of 2023. Shares climbed nearly 8% in premarket trading, signaling investors feel the report lived up to the hype. NVDA 1D mountain Nvidia’s 2023 rally Nvidia also forecasted for more strength ahead with guidance for current-quarter revenue set at around $16 billion. That would easily surpass the $12.61 billion anticipated by analysts. Meanwhile, net income was more than 400% higher than the same quarter a year ago. Multiple Wall Street analysts pointed to Nvidia’s data center business, which includes its AI chips, as an area with potential to help drive further gains. And it’s already a popular business: the company reported $10.32 billion in data center revenue, reflecting a 171% increase from the same quarter a year ago. “We have long viewed NVDA as the primary beneficiary of the increasing investments being made on large language models/generative AI training clusters, said Stifel analyst Ruben Roy, who upgraded his rating to buy from hold following the report. However, “we underestimated the opportunity related to the potential shift of $1 trillion of installed data center infrastructure from general purpose compute to accelerated compute architectures.” Roy also raised his price target for shares to $600, which reflects a 27.3% jump from Wednesday’s close. If met, that price target equates to a more than 310% gain from where the stock finished 2022. He isn’t the only one growing increasingly bullish following the report. While keeping his overweight rating, Wells Fargo analyst Aaron Rakers also raised his target to $600 per share. Some are expecting even more gains ahead. Goldman Sachs analyst Toshiya Hari raised the firm’s price target to $605 per share from $495. Bank of America’s Vivek Arya hiked his price target to $650 from $550, and Atif Malik of Citi now expects the stock to go to $630. In addition to the data center business, Goldman’s Hari pointed to improving supply as a reason to be optimistic that there’s still upside ahead. And BofA’s Arya said the company’s free cash flow is another thing to like. “We recognize emerging competition from the large cloud service providers (i.e. captive/internal solutions) as well as other merchant semiconductor suppliers,” Hari said. But, “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.” The report has even gotten the stamp of approval from those on the sidelines. While Deutsche Bank analyst Ross Seymore applauded the release, he said he’d maintain his hold rating while waiting for a more attractive entry point. “In a highly anticipated report and against elevated expectations, NVDA delivered another stunning quarter as demand for AI compute … remains as robust as ever,” he said. “The co’s outlook was even more impressive.” — CNBC’s Michael Bloom contributed to this report
