Goldman, JPMorgan and others crank up Nvidia price targets in wake of latest earnings

Nvidia has once again wowed Wall Street — and analysts see massive upside ahead for the dominant maker of chips used in artificial intelligence. Led by CEO and co-founder Jensen Huang, Nvidia tripled its revenue in its latest quarterly results late Tuesday, handily beating analyst estimates. Nvidia forecast revenue of $20 billion for the fourth quarter, which would equate to growth of more than 230%. But the stock saw muted moves early Wednesday, falling about 2% despite the strong report. Some analysts chalked that up to concerns about whether demand will prove sustainable, especially in the wake of export restrictions on sales to businesses in countries such as China. Nvidia said it will feel a negative impact from the ban in the current quarter. The stock reaction may also simply reflect the fact Nvidia has more than tripled in 2023, climbing 230% — far and away the best performance in the S & P 500 — and 19% in November alone. Still, analysts said there was a lot to like in the AI darling's latest earnings report. Many on Wall Street already had buy-equivalent ratings on the stock and kept those bullish calls in place. Several analysts hiked their price targets for the stock to show they expect greater upside ahead after the latest financials. Below, CNBC Pro compiled a list of major investment firms that raised their price targets following the Nvidia report, along with their key conclusions: Goldman Sachs Analyst Toshiya Hari raised the price target by $20 to $625. The new target implies an upside of 25% from Tuesday's close. “While we expect the debate around CY2025 earnings power to continue, we come away from the call with increased conviction that the combination of a) idiosyncratic product cycles across Nvidia's Compute (i.e. GH200, L40S) and Networking (Spectrum-X) franchise, b) strong demand from an increasingly diverse customer base (e.g. uptick in demand from regional cloud service providers and governments), and c) improving supply, will support growth in Data Center for the foreseeable future. Importantly, despite emerging competition from both merchant and captive chip suppliers, we envision Nvidia expanding on its dominant position in training through the introduction of hardware (e.g. H200) and software (e.g. TensorRT-LLM) that tailor to inference and services (e.g. AI Foundry Service) that allow the company to move further up the stack.” JPMorgan Analyst Harlan Sur hiked his target by $50 to $650. That new target shows he sees the stock climbing 30% over the next year compared to where it finished Tuesday. “Expectations were high coming into the print and the team managed to deliver results/outlook that were above market expectations, in our view, driven by the massive demand pull for its datacenter products despite the impact of U.S. export controls (expect sales to China regions to decline significantly in the Jan-Qtr).” Morgan Stanley Analyst Joseph Moore added $3 to his price target, bringing it to $603. With the increase, he sees the stock rising 21% from Tuesday's close. “The bottom line is that the exceptional tenor of the AI GPU market has not changed, as lead times remain elevated despite a steep supply chain ramp. Lead times are likely to come down at some point in CY24 given the steepness of the supply chain — and we spend quite a bit of time thinking about what that might mean for the stock if and when it happens — but that is simply not in evidence right now even with a very steep supply chain ramp.” Wells Fargo Analyst Aaron Rakers upped his target price to $675 from $600, implying upside of about 35%. “Our Overweight rating is based on our positive stance on NVIDIA's competitive positioning in gaming GPUs and expanding growth opportunities in data center, HPC, and emerging / expanding AI opportunities (autonomous vehicles, healthcare, robotics, etc.). We see sustainability in NVIDIA's CUDA software platform differentiation, as well as the company's continually deepening system software capabilities. We see NVIDIA as one of the most attractive secular growth stories in large-cap semis.” Bank of America Analyst Vivek Arya increased his price target to $700 from $650. With the addition, the bank now sees shares surging 40% over the next year. “Bears may complain about: 1) China weakness in Q4 outlook: China restriction a risk, but we think demand remains supply constrained well into CY24, with NVDA Q4 sales outlook well ahead even with China sales likely down 30-40% QoQ on our estimate; and 2) Sustainability of growth: we believe CY24 cloud strength will be continued by enterprise AI/copilot adoption, with NVDA targeting data center growth well into CY25E.” UBS Analyst Timothy Arcuri added $20 to his target, bringing it to $580 per share, for 16% upside against Tuesday's closing price. “NVDA sure sounds confident on sustained growth — and it makes sense to us as waves of growth are starting to build with horizontal enterprise software companies starting to embed NVDA AI into their platforms to take out into the world and broaden the NVDA ecosystem. Net/net, we think it is still too early to get off this train – especially as NVDA becomes the de-facto global platform for what might be one of the most transformational technologies of our lifetime (AI).” BMO Capital Markets Like JPMorgan, BMO analyst Ambrish Srivastava hiked his target price by $50 to $650. That implies upside of 30% from where the stock finished Tuesday. “We are referring to the beat and raises here, driven by continued spend towards generative AI across verticals and industries. NVIDIA also appears to be opening up several complementary opportunities, such as what it sees as a multi-billion dollar opportunity for its Grace Hopper line-up, and its networking business, which has grown ~10x since the acquisition; seldom do we see an acquisition work out the way this one has in such short order.” Stifel Analyst Ruben Roy added $65 to his target, bringing it to $665. The new target reflects a belief that Nvidia can rally 33% in the next 12 months. “NVDA, again, exceeded expectations with its 3Q results and 4Q outlook. 4Q guidance would have been higher if not for the expected drop-off in China revenue related to updated licensing requirements and export restrictions on certain high-performance products and systems. … Commentary on inference, and longer-term opportunities in that arena, sound increasingly positive to us. Overall, many more positives than negatives, in our view.” Bernstein Analyst Stacy Rasgon increased his target price by $25 to $700, equating to 40% upside over the coming year. “At this point everyone knows that AI demand is strong, and hence the primary controversy on the stock has been the question of sustainability. At this point we doubt that question will find resolution; however numbers are going to continue marching materially higher, and it does seem the trajectory should be fine well into CY24 and plausibly beyond given continued strong demand and new product ramps which may help to support and sustain the trajectory. In the meantime China regulatory headwinds appear to be manageable for now given strong demand elsewhere, and the company is working on new products that will ideally be compliant which may help to backfill some of that missing demand over time.” Mizuho Analyst Vijay Rakesh yanked his price target to $625 from $590, showing faith the stock can climb 25% from Tuesday's close. “While we believe there could be some investor concerns with sustainability of [date center] demand, we are estimating F25E DC up 50%+ y/y while NVDA noted it believes data center can grow through C2025. NVDA AI leadership has remained largely unchallenged, and we expect NVDA to continue to lead the market, though 2024E could see increasing competition coming from INTC's Gaudi2/3 and AMD MI300/400 and traction at Cerebras (private) [wafer scale engine].” Truist Analyst William Stein moved his target price $6 higher to $674, for 35% potential upside. “NVDA's results & guidance beat consensus to a pulp, but were likely closer to buyside views. Results & guidance continue to reinforce our thesis: NVDA is *the* AI company. Its leading position in parallel compute & AI is owing less to its chips and more to its culture of innovation, ecosystem of incumbency, and massive investment in software & models. … While we do expect a cyclical downturn to plague NDA at some point (it's happened twice in the last few years already!), we just don't know when it will return. There is an increasingly clear case that suggests NVDA's revenue can grow through CY25, and it is based on new and ramping products and services.” — CNBC's Michael Bloom contributed to this report