Nvidia (NASDAQ:NVDA)
After the semiconductor giant Nvidia (NASDAQ:NVDA) reported first-quarter earnings and outlook that startled investors, Nvidia’s stock jumped more than 25% in early trading on Thursday. Many on Wall Street have speculated that these numbers mark the beginning of the artificial intelligence revolution.
According to Dan Ives, an analyst at Wedbush Securities, the results and outlook are the greatest sign of demand for AI so far, notwithstanding the excitement around products and services like ChatGPT.
Ives said in a note to investors, “For any investor calling this an AI bubble (crypto, metaverse, now AI bubble thesis), we would point them to this Nvidia quarter and especially guidance which cements our bullish thesis around AI and speaks to the 4th Industrial Revolution now on the doorstep with AI.”
CEO Jensen Huang said on the results call that the “iPhone moment” for artificial intelligence has arrived.
Huang said, “The integration of guardrails and alignment systems was done through reinforcement learning, human feedback, knowledge vector databases for proprietary knowledge, and connections to search. All of this came together in a great way, and that’s why I call it the iPhone moment. All the technology came together and helped everyone see what an amazing product it can be and what it can do.”
While the potential in AI is anticipated to be worth around $800B over the next decade and more as adoption develops, Ives said that he had never seen a guideline range like this before.
Even if the near-term macro background is worrying about the debt limit and a recession, Ives argues that the AI revolution is here to stay and is one of the most investable tech topics we have seen in decades.
Stacy Rasgon, an analyst at Bernstein, compared the company’s performance and outlook to “The Big Bang.” Consequently, he maintained his outperform rating and increased his price objective for each share to $475 from $300.
He continued by saying that the only issue remains whether the current trend of data centers is the new normal or just a boom due to the hoopla surrounding generative AI.
The forecast represents the first “massive wave” for the market for generative AI, according to J.P. Morgan analyst Harlan Sur, who maintained the firm’s overweight rating on Nvidia while increasing the price target from $250 to $500.
“Accelerating demand for Nvidia’s accelerated compute/networking platforms and software solutions is being driven by generative AI and large language/transformer models,” Sur wrote in an investor note.
The outlook is “without precedent” regarding upside over consensus. Richard Shannon, an analyst at Craig Hallum, raised Nvidia (NVDA) to buy and increased his price objective for the stock to $500 per share from $190.
Shannon has increased his profits forecast for the fiscal year 2025 to $10 per share.
After reporting impressive results and providing an optimistic outlook for the first quarter, 21 Wall Street companies increased their price targets for Nvidia stock.
Second-quarter revenue is expected to be $11 billion for Nvidia (NVDA), give or take two percent. This is much more than the $7.18 billion predicted by analysts.
In response to the increased demand for AI-related items, the firm has announced that it would “significantly” expand its supply of data center-related products.
Nvidia chip supplier Taiwan Semiconductor saw its stock price rise by almost 6% after the company released its earnings and outlook.
In addition to Microsoft, C3.ai, SoundHound AI, and BigBear.ai Holdings, shares of closely related semiconductor companies such as AMD, Marvell Technology, and Synaptics jumped on the findings.
In contrast, Nvidia and AMD rival Intel saw its stock price drop by roughly 2%.
Featured Image: Freepik
