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On Wednesday, Deutsche Bank (ETR:DBKGn) analyst Ross Seymore affirmed a Hold rating on NVIDIA (NASDAQ:NVDA) shares, with a consistent price target of $145.00. The semiconductor giant, currently valued at $2.82 trillion, has demonstrated remarkable financial strength with a perfect Piotroski Score of 9, according to InvestingPro data. Seymore’s remarks followed NVIDIA CEO Jensen Huang’s keynote at the GTC 2025 conference in San Jose. Seymore highlighted NVIDIA’s optimistic outlook on the growth of AI compute needs, countering any concerns about the scaling limits of AI.
NVIDIA projects a substantial increase in inference-related compute needs, estimating a 100-fold rise from last year’s expectations. The company, which has achieved an impressive 114.2% revenue growth over the last twelve months with a robust 75% gross profit margin, anticipates that the demand for processing power will surge, particularly due to advancements in reasoning models and edge inference applications. These models are more accurate but also require significantly more computing resources than traditional Large Language Models (LLMs).
The anticipated growth in AI compute requirements is seen as a positive indicator for data center capital expenditure, which NVIDIA expects could reach $1 trillion by 2028. This represents an approximate compound annual growth rate (CAGR) of 25%. NVIDIA’s confidence in the continuous need for scaling AI compute solutions is supported by its introduction of new technological innovations. These include an advanced GPU roadmap, disaggregated NVLink switches, the NVIDIA ’Dynamo’ operating system designed for AI factories, and co-packaged silicon photonics options.
NVIDIA’s forward-looking approach and technological developments are aimed at meeting the rapidly expanding needs of AI computing. The company’s emphasis on the potential for growth in AI compute spend reflects its commitment to staying at the forefront of the industry and addressing the increasing demands for more powerful and efficient computing solutions.
Deutsche Bank’s reiteration of the Hold rating and price target suggests a cautious but observant stance on NVIDIA’s stock, acknowledging the company’s strategic moves in the AI space while maintaining the current valuation perspective. Trading at a P/E ratio of 39.25, NVIDIA’s stock is currently trading near its InvestingPro Fair Value. Investors seeking deeper insights can access comprehensive analysis and 18 additional ProTips through the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, NVIDIA Corporation has garnered significant attention with its latest developments. The company reported strong confidence in its gross margin recovery, expected to reach the mid-70% range in the latter half of the year, as highlighted by discussions with NVIDIA’s CFO. NVIDIA’s announcements at its Global Technology Conference (GTC) showcased advancements in AI performance and networking hardware, underscoring its competitive edge. Furthermore, NVIDIA’s innovations in networking, including co-packed optics and Silicon Photonics, were emphasized by Wells Fargo (NYSE:WFC), which maintained an Overweight rating with a $185 target.
Bernstein also reiterated an Outperform rating with a $185 target, citing NVIDIA’s strong product roadmap and lead in the datacenter sector. Similarly, Raymond (NSE:RYMD) James maintained a Strong Buy rating with a $170 target, highlighting optimistic projections for data center capital expenditures. Meanwhile, OpenAI’s Stargate project, which will house up to 400,000 NVIDIA AI chips, is under construction in Texas, promising a significant boost in AI computing power. The project, part of a $100 billion investment, aims to create one of the largest AI data centers, emphasizing NVIDIA’s pivotal role in AI infrastructure development.
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