- HSBC analyst Frank Lee double-upgraded NVIDIA Corp (NASDAQ:NVDA) to Buy from Reduce and increased the price target to $355 from $175.
- Lee acknowledges that he underestimated NVIDIA’s potential to cash on AI opportunity and speeding ramp-up post Microsoft Corp‘s (NASDAQ:MSFT) ChatGPT launch.
- While the overall TAM of generative AI remains difficult to forecast, the analyst noted that NVDA has the highest potential leverage from a hardware perspective.
- The analyst now sees NVIDIA as a dominant player in the industry, with over 90% market share.
- The analyst expects AI opportunity to benefit NVIDIA, given the prices of its AI chips (GPUs) of $10,000 for the A100 and $20,000 for the H100 are over 10x-20x higher than the average gaming GPU price of $1,000. Hence, the analyst believes high ASP will aid in reaching their expected revenue growth.
- Lee increased the sales estimate for 2024 by 18% to $33.37 billion and 2025 by 20% to $43.14 billion. He also raised 2024 EPS estimate by 25% to $5.11 (12% above consensus) and 2025 by 33% to $7.10 (18% above consensus).
- Given the aggressive rollout of ChatGPT by Microsoft and other AI initiatives from U.S. and Chinese cloud service providers, the analyst projects additional revenue contribution from AI GPUs of $5.2 billion in 2024 and $11.1 billionn in 2025. This leads to the analysts’ overall datacentre revenue projection of $20.3 billion (vs consensus of $17.4 billion) and $26.1 billion (vs consensus of $22.4 billion).
- Also Read: Nvidia Stock Jumps On Double Upgrade And 100% Hike To Price Target
- Price Action: NVDA shares are trading higher by 3.11% at $278.42 on the last check Tuesday.
The Latest Analyst Ratings for Sage Therapeutics
Over the past 3 months, 4 analysts have published their opinion on Sage Therapeutics (NASDAQ:SAGE) stock. These analysts…
