Nvidia has lost some of its momentum in the last couple of months. That shouldn’t put off investors who should back the stock ahead of the launch of its next generation of graphics-processing units, according to analysts at Citi and Goldman Sachs.
Nvidia
(ticker: NVDA) stock has almost tripled in value this year but the semiconductor maker’s shares have largely moved sideways in the past couple of months. Investors look to have priced in the gains from Nvidia’s H100 GPU becoming the most in-demand chip for artificial-intelligence applications.
However, Goldman Sachs added the stock to its Conviction List on Monday, arguing that investors are still undervaluing its role as the principal “shovel supplier” in the AI boom. Goldman’s Toshiya Hari has a 12-month target price of $605 on Nvidia stock.
Nvidia shares were up 0.7% at $438 in premarket trading on Monday.
Further gains could be unlocked if Nvidia releases its next-generation B100, or Blackwell, GPU in the first half of next year, according to Citi analyst Atif Malik. Nvidia’s normal AI chip production schedule would call for a release in the second half of 2024 but the company might accelerate its timeline to meet booming demand and stave off competition, Malik said.
“[The] B100 GPU could be an even bigger AI game changer than H100 at its launch from a technology standpoint and set for a rapid adoption which subsequently will drive up Nvidia’s ASPs [average selling prices], sales, and margins,” Malik wrote.
Malik noted the B100 could represent a significant technological advance if Nvidia uses
Taiwan Semiconductor Manufacturing’s
(TSM) 3-nanometer manufacturing process, as well as adopting ‘chiplet’ stacking technology which combines multiple small chips.
Malik has a Buy rating and $630 target price on Nvidia shares, based on a price-to-earnings multiple of 35 times the company’s forecast 2025 earnings.
Write to Adam Clark at [email protected]
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