Friday, Oppenheimer increased its price target for NVIDIA Corporation (NASDAQ:NVDA) shares to $850 from the previous $650, while keeping an Outperform rating on the stock.
The firm's analyst wrote in a note, "We (and most) see upside to F4Q (Jan.)/F1Q (Apr.) print/outlook led by DC as CSPs/enterprise invest in accelerated compute."
The analyst noted that investors are looking forward to updates regarding NVIDIA's business in China, which has historically accounted for 20-25% of its data center revenue, especially in light of recent U.S. government restrictions. The launch of new 'work-around' accelerators, including the H20, L20, L2, and 4090D, is also a point of interest.
The easing of packaging constraints, specifically CoWoS (Chip-on-Wafer-on-Substrate) technology, is expected throughout the year. NVIDIA's comprehensive hardware and software platform, which includes core GPUs, DPUs, CPUs, InfiniBand/Ethernet switches, SuperPOD server clusters, and cohesive software libraries, is seen as a key driver in supporting a broad AI ecosystem.
The analyst pointed out that the shipping of NVIDIA's L40S GPU for enterprise customers represents another opportunity for growth. Additionally, the upcoming Grace CPU is seen as a greenfield opportunity that could further enhance NVIDIA's market position.
An increase in gross margins is also projected, with an expectation of a rise of 50 basis points to 75.5% in the fourth fiscal quarter. The affirmation of the Outperform rating and the new price target of $850 reflect the analyst's confidence in NVIDIA's growth trajectory and market opportunities.
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Moreover, NVIDIA's Gross Profit Margin stands at a healthy 69.85%, suggesting that the company is not only increasing its revenue but also maintaining efficiency in its cost of goods sold. This aligns with the analyst's projection of an increase in gross margins, reinforcing the positive outlook for NVIDIA's profitability.
InvestingPro's real-time data and expert insights provide a valuable perspective for those tracking NVIDIA's stock, especially in the context of Oppenheimer's recent price target increase and the company's strategic initiatives in the rapidly evolving tech landscape.
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