Chip analysts boost Nvidia price targets in race to catch up to chipmaker's relentless 'joyride'

Published Thu, Feb 22 20249:38 AM ESTUpdated Thu, Feb 22 202412:45 PM EST

Nvidia wowed Wall Street yet again late Wednesday when it posted another quarter of multi-billion dollar revenue upside as companies continued snatching up advanced chips to power artificial intelligence models. That led several Wall Street banks to hike their price targets to account for the unrelenting demand. Nvidia surged 13% Thursday and lifted other semiconductor makers after its fourth quarter revenue soared 265% year-over-year — topping analysts' highest estimates on both the top- and bottom lines — and first quarter guidance blew past Wall Street milestones. NVDA 1D mountain Nvidia pops after strong earnings "The company is printing money at this point," wrote Bernstein's Stacy Rasgon, boosting his firm's price target to $1,000 a share. "And the prospect for continued growth from here still seems solid." Several other Wall Street shops also raced to catch up with Nvidia's share price, hiking their price targets in reaction to nonstop demand and the company's enormous total addressable market. Rasgon's new target was the equivalent of 48% upside from Wednesday's close, while the average price target according to FactSet implied more than 22% upside. Elsewhere, Bank of America's Vivek Arya lifted his Nvidia price target to $925 per share, equal to about 37% upside. He also raised his long-term EPS target for calendar 2027 to $45 from $40. JPMorgan analyst Harlan Sur boosted his price target to $850 to reflect strong data center growth and future product launches. "More importantly, the [Nvidia management] team noted that demand will continue to outstrip supply through CY24, allaying fears of an inventory build/correction in the 2H of the year," Sur wrote. Nvidia's "robust" AI infrastructure and new product rollouts should fuel continued outperformance, said Goldman Sachs analyst Toshiya Hari. Meanwhile, Morgan Stanley's Joseph Moore called the strength of Nvidia's AI demand "remarkable," and highlighted inference products accounting for 40% of revenues as a "clearer case for growth" in 2025. "Nvidia beat and raise vs. our increased estimates; perhaps more importantly, resizing the inference market and characterizing supply chain issues points to ongoing durability," Moore said. NVDA YTD mountain Nvidia shares year to date Despite the blowout numbers Nvidia reported in the quarter ended in January, some Wall Street analysts still managed to offer up a cautious stance on the chipmaker. Deutsche Bank's Ross Seymore retained his hold rating even as the "joyride continues," noting that a key portion of Nvidia's gross margin upside stemmed from advantageous component costs that are expected to ease in the current period. "Overall, we applaud NVDA for yet another quarter of massive upside on both the top and bottom line ... and believe fundamental momentum remains in NVDA's favor in the near and medium terms," Seymore wrote. "However, on moderately higher estimates ... and after embedding a modest cyclical correction in 2025, we believe NVDA's earnings potential is sufficiently reflected in the [company's] current valuation." But contrary to those few analysts who raised concerns over the sustainability of seemingly endless demand for Nvidia's products, UBS analyst Timothy Arcuri believes the cycle is "still early innings." "There were a few items that could maybe suggest some slowing revenue growth on the horizon (mostly supply and opex) but we will have to see how these evolve," Arcuri wrote. "The bottom line is that we are still in such early stages of what is possible with AI .... and NVDA is the de-facto global AI platform, it seems too soon to take a more cautious view," he said. — CNBC's Michael Bloom contributed reporting