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Investing.com - Barclays raised its price target on Nvidia (NASDAQ:NVDA) to $240 from $200 on Thursday, while maintaining an Overweight rating on the chipmaker’s stock. According to InvestingPro data, analyst targets for Nvidia range from $100 to $270, with 29 analysts recently revising their earnings expectations upward. The stock currently trades near its 52-week high of $184.55, with InvestingPro’s Fair Value analysis suggesting the stock is slightly overvalued at current levels.
The price target increase follows Barclays’ analysis of planned AI infrastructure spending, which the firm now estimates at over $2 trillion with approximately 40GW of power consumption in total. Barclays attributes about 65-70% of this spending to compute and networking components. This massive opportunity aligns with Nvidia’s impressive financial performance, as InvestingPro data shows revenue growth of 71.55% and an exceptional return on assets of 76.65%.
Barclays has created an AI capacity tracker that aggregates announced compute deployments, power requirements, and chip volumes, which it plans to update in real time for clients. The firm calculated the spending estimate using conversions of 1GW equaling $50-60 billion of total expenditure and the recent metric of 1 million GPUs per 2GW associated with last week’s OpenAI deal.
The firm’s analysis suggests this spending equates to approximately $1.5 trillion in compute and networking expenditures and 19 million GPUs, though Barclays acknowledges this calculation isn’t perfectly pro-forma and some spending will go toward custom silicon.
While Barclays views this trend as positive for all accelerator companies including Broadcom (NASDAQ:AVGO) and AMD (NASDAQ:AMD), it believes Nvidia will capture a significant portion of this spending over the next five or more years, making it "the most attractive name in our space." With a market capitalization of $4.3 trillion and an EXCELLENT financial health score according to InvestingPro, Nvidia appears well-positioned to capitalize on this opportunity. For deeper insights into Nvidia’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Micron Technology reported quarterly earnings that exceeded analyst expectations, with revenue reaching $11.32 billion, surpassing Wall Street’s forecast of $11.12 billion. The company also posted a gross margin of 45.7% and non-GAAP earnings per share of $3.03, both figures above consensus estimates. In a significant development, RedCloud Holdings announced its entry into the NVIDIA Connect program to enhance its AI capabilities, aiming to address a $2 trillion global inventory gap in the FMCG industry. Alibaba has partnered with Nvidia on a new Physical AI initiative, focusing on various aspects of Physical AI practices. Meanwhile, Nvidia’s partnership with OpenAI has been highlighted by UBS, which maintains a Buy rating and a $205.00 price target, citing potential significant revenue generation. Mizuho also reiterated an Outperform rating for Nvidia, noting the $100 billion equity investment in OpenAI to fund AI data center capacity. These developments reflect ongoing strategic partnerships and financial performances across the tech industry.
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