Bullish indicating open at $55-$60, IPO prices at $37
On Thursday, TD Cowen expressed continued confidence in NVIDIA Corporation (NASDAQ:NVDA), reiterating a Buy rating and maintaining the $175.00 price target on the stock. According to InvestingPro data, NVIDIA currently trades at $131.28, with analysts setting targets between $120 and $220. The company, recognized for its leadership in accelerated computing, is anticipated to sustain robust growth in its Datacenter business in the forthcoming years, according to the firm’s analysts.
The research firm’s analysts highlighted the strategic advantage NVIDIA has with its CPU/GPU/DPU combination in the Grace/Blackwell systems, which are expected to transition to Vera/Rubin systems eventually. This technology positions NVIDIA favorably in the market, supporting the projection of strong Datacenter growth.
TD Cowen’s analysts project NVIDIA’s earnings power to surpass $7 by the calendar year 2030, even with conservative estimates that include a digestion year in 2027. This outlook aligns with NVIDIA’s impressive financial performance, including a 152.44% revenue growth and industry-leading gross margins of 75.86%. This digestion period, which allows for market absorption of new technologies, has been postponed twice, initially expected in the calendar year 2024.
The price target of $175.00, which is based on approximately 31 times the forecasted fiscal 2027 earnings per share (EPS), reflects the firm’s valuation of the company’s growth prospects. NVIDIA’s stock continues to be one of TD Cowen’s Top Picks, signaling the firm’s strong belief in the company’s performance and future potential. InvestingPro analysis reveals 18 additional key insights about NVIDIA’s valuation and growth prospects, available exclusively to subscribers.
NVIDIA, known for its powerful graphics processing units (GPUs), has been expanding its reach into various computing sectors, including data centers and artificial intelligence. With a perfect Piotroski Score of 9 and a remarkable 66.86% return over the past year, the company’s strategic direction and innovations in accelerated computing have been key factors in its market dominance and are central to TD Cowen’s positive outlook on the stock.
In other recent news, NVIDIA’s financial performance has captured attention with its fourth-quarter and first-quarter sales surpassing Wall Street expectations by $1.2 billion and $1 billion, respectively. The company’s Blackwell platform played a significant role, generating $11 billion in fourth-quarter sales and contributing to a strong Data Center revenue of $35.6 billion, marking a 93% year-over-year increase. However, NVIDIA’s gross margin guidance for the first quarter was slightly lower than anticipated, at 71%, due to the initial costs associated with the Blackwell ramp-up.
Analysts from Oppenheimer, KeyBanc, and Jefferies have expressed confidence in NVIDIA’s future, maintaining ratings of Outperform, Overweight, and Buy, respectively, with price targets ranging from $175 to $190. DA Davidson, however, holds a Neutral stance with a $135 target, citing mixed financial outcomes. Cantor Fitzgerald remains optimistic, projecting significant EPS growth and maintaining an Overweight rating with a $200 target.
Despite concerns about supply chain issues, NVIDIA’s transition from the Hopper to the Blackwell architecture is expected to proceed smoothly, with the Blackwell Ultra (GB300) release anticipated to enhance performance. Analysts also noted NVIDIA’s discussions on new AI models and upcoming events like the GPU Technology Conference, which could further influence the company’s trajectory.
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