TLDR:
- Bank of America analyst Vivek Arya has raised Nvidia’s price target to $800
- Nvidia’s growth potential in AI accelerators is highlighted in anticipation of the GPU Tech Conference
BofA analyst Vivek Arya has reiterated a Buy rating on Nvidia Corp (NVDA), boosting the price target to $800 from $700. The chip designer will report its quarterly earnings after closing on February 21. The analyst will seek for a notable but more measured 3% – 5% or $0.5 billion – $1 billion upside to both the reported fourth quarter (consensus $20 billion) and guided first quarter (consensus $21.4 billion) mainly due to incremental supply gains offset by China restrictions and some transition effects before the B100 accelerator launch planned for the second half of 2024.
Arya’s top pick is Nvidia, supported by the potential for higher pricing with the upcoming B100 accelerator and underappreciated strength in AI inferencing. He notes that enterprise generative AI adoption has yet to kick off and become more substantial in 2025, with Nvidia benefitting from its widespread availability on public clouds and unique partnerships. Arya expects the data center AI accelerator market to grow from $43 billion in 2023 to over $160 billion by 2027, with Nvidia holding a 90% share in training and achieving more than 50% share in inference.
Nvidia is currently trading at 31x and 25x calendar year 2024 and 2025 PE, below its 45% calendar year 2023 – 2025 EPS CAGR. Arya projects fourth-quarter revenue and EPS of $20 billion (versus consensus of $20.17 billion) and $4.48 (versus consensus of $4.51).