Trump/Putin summit, UnitedHealth and Japan’s GDP - what’s moving markets
On Wednesday, BofA Securities maintained a bullish stance on NVIDIA Corporation (NASDAQ:NVDA), reiterating a Buy rating and a $200.00 price target. The positive outlook follows NVIDIA’s recent announcements at its Global Technology Conference (GTC) and a subsequent meeting with the company’s CFO. With a perfect Piotroski Score of 9 according to InvestingPro, and an impressive market capitalization of $2.82 trillion, NVIDIA continues to demonstrate strong financial health. Analysts at BofA Securities highlighted several key takeaways from the event that reinforce NVIDIA’s competitive edge in the market.
NVIDIA’s announcements at the GTC demonstrated the company’s ongoing efforts to strengthen its position in the infrastructure and services market, which has a total addressable market (TAM) exceeding $1 trillion. Backed by remarkable revenue growth of 114.2% in the last twelve months, the company’s product and partnership updates, particularly the shipping and ordering of 1.8 million Blackwell packages, significantly outpaced the 1.3 million Hopper units projected for 2024 among the top four cloud service providers (CSPs). This surge in demand is attributed to the increasing compute intensity required for inference tasks.
The introduction of new silicon, server, and system platforms, including Blackwell Ultra, Rubin, and Rubin Ultra, was also emphasized. These advancements are expected to deliver a substantial leap in AI performance, with Rubin providing up to 900 times the scale-up FLOPs of Hopper, while Blackwell offers a 68-fold increase. These innovations are designed to optimize total cost of ownership (TCO) for customers.
Moreover, NVIDIA’s expansion into networking hardware with the new Spectrum-X and Quantum-X switches was noted. These products are set to enhance the company’s networking capabilities and support the scaling of GPU clusters to over a million units. The company’s progress in expanding the physical AI TAM was also underscored, with significant announcements in the fields of robotics and autonomous vehicles (AVs).
Lastly, discussions with NVIDIA’s CFO indicated a strong confidence in the company’s gross margin recovery, anticipated to reach the mid-70% range in the second half of the year as Blackwell ramps up. The company already maintains a healthy gross profit margin of 75%, according to InvestingPro data. The comprehensive approach NVIDIA takes, encompassing hardware, software, systems, services, and a robust developer network, was cited as a key factor in its dominance over the AI value chain. For deeper insights into NVIDIA’s financial health and growth prospects, including 20 additional ProTips and comprehensive valuation metrics, investors can access the full Pro Research Report on InvestingPro.
In other recent news, NVIDIA has been the focus of several key developments. Wells Fargo (NYSE:WFC) maintained its Overweight rating on NVIDIA, citing the company’s innovative advancements in networking and GPU configurations, which are expected to enhance performance across various markets. Similarly, Bernstein reiterated an Outperform rating, highlighting NVIDIA’s strong product roadmap and its potential to capture a growing share of the datacenter market, projected to exceed $1 trillion in capital expenditures by 2028. Raymond (NSE:RYMD) James also maintained a Strong Buy rating, emphasizing NVIDIA’s growth prospects in AI and robotics, along with upcoming product releases like Blackwell Ultra and Vera Rubin NVL144.
Additionally, OpenAI’s ambitious Stargate project, which will house up to 400,000 of NVIDIA’s AI chips, is under construction in Texas, with completion expected by mid-2026. This project is poised to become one of the largest AI computing power clusters, supporting NVIDIA’s role in advancing AI technology. In another strategic move, NVIDIA has partnered with Oracle (NYSE:ORCL) to enhance enterprise AI applications, integrating NVIDIA’s computing capabilities with Oracle’s AI infrastructure. This collaboration aims to streamline AI deployment for enterprises, offering over 160 AI tools and accelerating AI vector search capabilities. These recent developments underscore NVIDIA’s ongoing efforts to solidify its position in the technology landscape.
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