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Citi analysts gave Nvidia a nod of approval on Tuesday and highlighted the firm’s chips and supercomputer as reasons for their growing confidence even after the stock more than doubled over the past year.
The stock’s recent rally has been fueled by the craze behind artificial intelligence tools and the subsequent need for Nvidia AI-geared graphics processing units (GPUs). The demand has helped the company offer investors a stellar forecast with revenue for the current quarter exceeding expectations by $4 billion. Nvidia became the first chip company to earn a trillion-dollar market capitalization on Tuesday, albeit only briefly.
Even with Nvidia’s stock down 2.1%, to $392.65, Wednesday, it has gained 169% this year. Still, Citi’s Atif Malik sees more upside ahead. He reiterated his Buy call on Nvidia’s stock, citing CEO Jensen Huang announcements during a computer expo held in Taiwan on Monday. Those announcements—of an AI-powered chip called the GH200 GraceHopper Superchip, the MGX Server, and a new networking platform Spectrum-X—were a clear indication of the company’s effort to lean into its dominance and establish a more robust presence, Malik writes.
Even with the stock at 50 times 12-month earnings expectation, above its five-year average of 39.2 times, Malik, who has a $420 price target on the stock, recommends investors continue buying the stock.
There’s “more untapped total addressable market in sight,” he writes, estimating a total of over $1 trillion going from artificial networking to the largely CPU-centered server market.
Analysts from Oppenheimer’s Rick Schafer and Susquehanna’s Christopher Rolland to Truist’s William Stein had also raised their price targets earlier this month, citing confidence in Nvidia’s artificial intelligence tools.
Write to Karishma Vanjani at [email protected]
