By Senad Karaahmetovic
Nvidia (NASDAQ:NVDA) shares closed just over 1% yesterday after the company presented new chips, supercomputing services, and a series of new high-profile partnerships.
Investor focus was on the AI applications given the ongoing hype around ChatGPT and generative AI chatbots in general.
"The iPhone moment of AI has started," Nvidia's president and chief executive officer Jensen Huang said in the virtual keynote address.
Here are comments from Wall Street analysts who attended yesterday’s event.
Oppenheimer: “We see sustained structural growth led by DC AI as cloud accelerator attach increases; we expect AI attach in cloud to approach 50% in 4–5 yrs, from <20% today. We see NVDA's DC AI ecosystem dominant and well positioned.”
Raymond James: “We estimate that Cloud service offerings present ~$1B/yr incremental revenue opportunity in the next 2–3 years (based on $2.23B purchase commitments for Cloud capacity for the next 4-6 yrs)... [We] reiterate Strong Buy on AI/ML dominance, Gaming recovery, Auto inflection, and emerging Software/services opportunity.”
Stifel: “We continue to view NVDA as amongst the best positioned companies to benefit from accelerated AI focused spending. With shares trading at 46.5x our C2024 EPS estimate (45x consensus), we believe strong near-term momentum is well understood.”
Morgan Stanley: “The developments spanning hardware, software, and services show a large scope of ambition in a market that looks likely to meaningfully inflect. Chat GPT capability is not new, but it's introduction has clearly spurred a wave of investment that we think is at an early stage. Valuation is obviously expensive on both an absolute and relative basis, but with the combination of idiosyncratically strong short and long term business trends it seems likely stay that way. We reiterate our OW call and PT of $304.”
Evercore ISI: “A few surprise positive developments, but in our view this event was largely as expected and primarily served to increase confidence in NVDA’s positioning as the Arm’s dealer and enabler of AI adoption across every industry. Generative AI is marking an inflection point for AI and we continue to view NVDA as best positioned to capitalize on this dynamic. We reiterate our Outperform rating and $300 price target as NVDA remains a TOP PICK.”
Nvidia shares are up about 0.7% in premarket Wednesday.