On Thursday, Summit Insights analysts sustained their optimistic stance on NVIDIA Corporation (NASDAQ:NVDA), maintaining a Buy rating on the company's stock.
"NVDA remains the best name in our coverage universe as we believe more upsides remain from its data center business," said the analysts in a note.
Summit Insights expressed confidence that NVIDIA will preserve its competitive edge in power performance value, especially with its forthcoming artificial intelligence (AI) graphics processing units (GPUs) planned for release in the second half of 2024. The firm's position is supported by ongoing market research, which suggests that demand for NVIDIA's AI GPUs is still exceeding supply.
The analyst from Summit Insights addressed concerns regarding the sustainability of NVIDIA's data center growth through the latter half of 2024. Despite worries about possible double ordering by customers and the high expectations set by "whisper numbers," the firm's investigations indicate that the increasing demand for NVIDIA's AI GPUs is a solid trend, not a temporary surge.
The firm also noted that while the lead times for NVIDIA's AI GPUs are shortening, this change is attributed to improvements in supply rather than a decrease in demand. This detail reassures the firm's belief in the robustness of NVIDIA's market position.
Summit Insights concluded that, based on their findings, there is substantial potential for NVIDIA's performance to surpass the current consensus estimates in the near term. The firm's analysis suggests a promising outlook for NVIDIA's stock, driven by strong demand for its innovative AI GPU offerings.
InvestingPro Insights
Amidst Summit Insights' bullish outlook on NVIDIA Corporation (NASDAQ:NVDA), InvestingPro data and tips provide additional context for investors considering the stock. NVIDIA's impressive revenue growth is highlighted by a 57.07% increase over the last twelve months as of Q3 2024, underlining the company's expanding market presence. The company's substantial gross profit margin of 69.85% during the same period reflects its ability to maintain profitability despite competitive pressures.
InvestingPro Tips reveal that NVIDIA has a perfect Piotroski Score of 9, indicating a strong financial position, and analysts have revised their earnings upwards for the upcoming period, suggesting further optimism around the company's performance. Moreover, NVIDIA's stock has exhibited a high return over the last year, with a 225.25% price total return, showcasing the market's positive reception to its growth trajectory and technological advancements.
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