Most of the large companies have already filed their latest quarterly reports, but some have yet to file their latest financial statements. After closing on Wednesday (May 24), NVIDIA (NASDAQ: NVDA) We will announce the financial results for the first quarter of fiscal year 2024 (April quarter).
Trust analyst William Stein thinks investors are in for a pleasant surprise, given recent conversations with component suppliers in the chip giant’s supply chain.
“We have recently seen an increase in demand for AI GPUs,” notes the five-star analyst. “The upside can be expected as the demand to build generative AI tools like ChatGPT continues to grow. As a result, we expect our first quarter (April) results and our second quarter (July) outlook to be upside to revenue and margin.”
Suppliers said they saw an increase in demand during March, which continued into April and into the “forecast period.” As Stein hinted above, we’d expect that with the H100, Nvidia’s latest-generation Hopper architecture system, especially considering all the excitement about his ChatGPT. But the fact that the “upward indicator” comes from his A100 (his Ampere architecture system in the late generation) and his A800 (his Ampere architecture GPU for the Chinese market) is even more baffling.
Whether the increased demand for A-series GPUs is due to a “cost-benefit performance analysis favoring A-series over H-series” or just overall demand is increasing, or perhaps H-series GPUs It is unclear if this is due to ongoing supply chain disruptions.
In any case, this new information is worth changing Stein’s assumptions. The analyst raised its forecast for future sales growth in the data center end market to 8.5% for both in the first and second quarters from 6% each. Additionally, the CY23 Data Center End Market revenue growth forecast was raised from +17% to +24% and the CY24 Data Center End Market revenue growth forecast was raised from +16% to +28%.
Whatever the reasons behind the surge in demand, Stein touts Nvidia as “The” AI company, and its leadership position is not due to semi-devices, but to its “culture of innovation, existing ecosystem and large It claims that it is due to “scale software investment”.
Over the past three months, 37 analysts have participated in NVDA reviews, with 29 ‘buy’ and 8 ‘hold’, all with a ‘strong buy’ consensus rating. That said, given the stock’s outperformance year-to-date (up 114%), the $296.29 average target means the stock is doing well enough so far. (See Nvidia stock predictions on TipRanks)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. Content is used for informational purposes only. It is very important to do your own analysis before making any investment.