NVIDIA Corporation‘s NVDA shares have seen a substantial rise in 2023, buoyed by the escalating interest and use cases of artificial intelligence. Analysts react to the company's third quarter earnings results and forward guidance.
The NVIDIA Analysts: Goldman Sachs analyst Toshiya Hari has a Buy rating and raises the price target from $605 to $625.
Piper Sandler Harsh V. Kumar has an Overweight rating and a price target of $620.
Morgan Stanley analyst Joseph Moore has an Overweight rating and raises the price target from $600 to $603.
Oppenheimer analyst Rich Schafer has an Outperform rating and a price target of $650.
Needham analyst Quinn Bolton has a Buy rating and a price target of $600.
Related Link: Nvidia Analysts Hail ‘Jaw Dropper’ Q3, But Downplay China Setback To Focus On Bigger Picture: ‘This Is A 1995 Moment’
Goldman Sachs on NVIDIA: Strong visibility into Nvidia's Data Center segment and improving supply were the highlights in the third quarter for Hari.
"While we expect the debate around CY2025 earnings power to continue, we come away from the call with increased conviction," Hari said.
The analyst highlighted Nvidia's strong demand from "an increasingly diverse customer base," which includes rising interest from regional cloud companies and governments.
“We envision Nvidia expanding on its dominant position in training through the introduction of hardware and software that tailor to inference and services that allow the company to move further up the stack.”
Piper Sandler on NVIDIA: The third quarter results and forward guidance exceeded Street expectations, standing out as highlights for Kumar.
"The blockbuster results were again driven by outperformance in the data center segment and the proliferation of the HGX platform for training and inferencing applications," Kumar said.
Commentary on restrictions in China was a negative in the third quarter, but Kumar said that other geographies could offset the declines.
"Furthermore, we see Nvidia continuing to benefit from the proliferation of their software platforms which should be a tailwind for margins going forward."
Following the company’s remarks on data center strength and increased supply, the analyst has upgraded the earnings per share and revenue forecasts for fiscal 2024.
Morgan Stanley on NVIDIA: A strong third quarter sets Nvidia up for a strong 2024, according to Moore.
"Nvidia had a very strong quarter – without the shock-and-awe upside of the last two quarters, but with a trajectory that should alleviate sustainability concerns," Moore said.
The analyst called the execution of the company's supply chain "unprecedented" given the speed of the ramp-up.
Moore said commentary on China was "largely as expected," with the region guided down sharply for the January quarter.
"A pattern of steady strong beats and raises is probably better for the stock longer term than an unsustainable trajectory."
Oppenheimer on NVIDIA: The company reported a "solid beat" and "solid raise" in the third quarter, according to Schafer.
Enterprise demand for artificial intelligence accelerators and increased adoption of Nvidia networking provided a boost in the third quarter, the analyst said. Adding that China is a meaningful headwind beginning in the fourth quarter.
"NVDA remains the purest scale play on AI proliferation," Schafer said. "We remain long term buyers."
Needham on NVIDIA: The strength of the company's Data Center was the highlight for Bolton in the third quarter.
The analyst said management's comments suggest Data Center revenue will grow through calendar year 2025 due to an increase in AI-related spending by companies.
Bolton said the weakness in China could be offset by strength in other geographies.
"The company hit elevated buy-side expectations for the quarter and guide, yet the stock was down slightly after hours," Bolton said. "We expect investors to continue postulating whether the company's DC revenue growth rate will slow."
NVDA Price Action: Nvidia shares are down 2.1% to $488.96 at the time of publication Wednesday, versus a 52-week trading range of $138.84 to $505.48.
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