On Wednesday, BofA Securities updated its outlook on NVIDIA (NASDAQ:NVDA), increasing the company's price target to $1,100 from the previous $925. The firm maintains a "Buy" rating on the stock. The adjustment comes in anticipation of NVIDIA's GPU Technology Conference (GTC) set to commence on March 18, 2024.
BofA Securities justifies the new price target by applying a 37 times calendar year 2025 price-to-earnings ratio, up from the prior 31 times. This valuation is noted to fall within NVIDIA's historical price-to-earnings range of 26 to 69 times.
According to the analyst from BofA Securities, the raised price objective reflects NVIDIA's growing addressable market in artificial intelligence (AI). The upcoming GTC event is expected to highlight several key developments, including the increasing influence of generative AI and omniverse/digital twins across various industries.
Additionally, the conference will likely discuss the potential for NVIDIA's technology to transform global computing infrastructure, which could represent an annual market of $250 to $500 billion over the next three to five years, an increase from the previously estimated $250 billion market size.
The GTC is also anticipated to provide updates on NVIDIA's product pipeline, including accelerators like the B100 and N100, Ethernet switches, data processing units (DPUs), and edge AI solutions. Furthermore, BofA Securities expects NVIDIA to share new details on the monetization of its recurring software services, such as AI Enterprise, and other offerings like DGX cloud services, automotive solutions, and gaming.
Lastly, the firm anticipates that NVIDIA will reveal expanded enterprise use cases and growing demand from sovereign entities and on-premises deployments. This outlook suggests that NVIDIA's technologies are gaining traction in a broader array of applications and sectors, potentially leading to increased revenue streams for the company.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.