Nvidia CEO Jensen Huang in his usual leather jacket.
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Nvidia shares opened up more than 12% on Thursday morning, a day after the chip maker reported a beat on its top and bottom lines. Analysts are also optimistic about the company’s AI vision.
Nvidia reported revenue of $6.05 billion for the fiscal fourth quarter and adjusted earnings per share of $0.88, beating the Wall Street consensus. It forecasts $6.5 billion in sales next quarter.
Analysts reacted positively to both Nvidia’s results and growth in its data center business, with many reiterating or upgrading ratings following the report. This vertical accounts for the majority of Nvidia’s AI GPU sales and grew 11% year-over-year.
More than a dozen analysts raised their price targets or gave the stock a positive rating.
“The adoption of artificial intelligence is at an inflection point. OpenAI’s ChatGPT has generated worldwide interest by allowing people to experience AI firsthand, showing what is possible with generative AI,” CEO Jensen Huang said on a call with analysts on Wednesday. Earlier this year, Huang called the transformation an “iPhone moment” in a fireside chat at UC Berkeley.
Nvidia’s work with artificial intelligence is “accelerating in a way that will have disruptive consequences” for both its competitors and “the world at large,” Rosenblatt Securities’ Hans Mosesmann said in a note on Wednesday.
Nvidia’s report on the same day Intel has cut its dividend by two-thirds, underscoring “a generational change like we’ve never seen,” continued Mossmann, reiterating a Buy rating and setting a $320 price target.
Credit Suisse’s Chris Case offered a similarly upbeat note, calling Nvidia stock “hard not to own” and maintaining it as the sector’s top pick. That rating, Case wrote, was driven by a “combination of de-risked play ratings combined with what we believe is the strongest upside potential in the semis from AI/data center.” Case raised its price target on Nvidia from $210 to $275.
And Goldman Sachs’ Tosia Hari upgraded Nvidia to a Buy rating and set a $275 price target. “In hindsight, we recognize that our decision to sit back pending a pullback in the company’s fundamentals was a mistake,” Hari wrote in a morning note on Wednesday, citing Nvidia’s “disciplined cost management” and accelerating adoption of artificial intelligence.
CNBC’s Michael Bloom, Jordan Naveth and Keef Lesswing contributed to this report.
