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NVIDIA stock maintains Outperform rating as analyst sees no demand slowdown

EditorAhmed Abdulazez Abdulkadir
Published 11/21/2024, 05:46 PM
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On Thursday, Baird, a financial services company, increased its price target for NVIDIA (NASDAQ: NASDAQ:NVDA) shares to $195 from the previous $150, while maintaining an Outperform rating on the stock. The adjustment follows industry conversations that align with NVIDIA's assertions regarding the implementation of its systems. Despite the complexity of system implementation, NVIDIA has not encountered critical issues like overheating that would impact demand.

NVIDIA is experiencing robust demand and requests for quotes (RFQs) for its Blackwell product. The company is seeking to secure chip-on-wafer-on-substrate (CoWoS) capacity from Taiwan Semiconductor Manufacturing Company (TSMC) that surpasses TSMC's committed output for the year 2025. This demand has been consistent, with the company's requirements already having increased multiple times in the past few months.

The absence of a demand slowdown is notable, as NVIDIA anticipates that the trend of data center modernization will continue globally over the next five years. This modernization spans from coding to the generation of artificial intelligence (AI). Additionally, the emergence of generative AI is expected to create a completely new layer of demand for NVIDIA's products.

NVIDIA's outlook is positive, with the company expecting that the ongoing evolution of data centers and the rise of generative AI will drive sustained demand for its technology. The company's proactive measures to secure necessary production capacity indicate a strategic approach to meeting the anticipated market needs.

In other recent news, NVIDIA has seen remarkable financial growth, reporting a record $35.1 billion in total revenue, a 94% increase from the previous year. This surge is largely attributed to the robust demand for AI infrastructure, with data center revenues climbing to approximately $30.8 billion. The successful launch of NVIDIA Hopper and the Blackwell architectures have also contributed to the company's financial success.

Raymond (NS:RYMD) James maintained a strong buy rating on NVIDIA, with a price target of $170, highlighting the company's strong third-quarter results and optimistic fourth-quarter outlook. The financial institution, Mizuho (NYSE:MFG), also maintained an outperform rating on NVIDIA, increasing the price target to $175 after the company's robust earnings report.

NVIDIA's management anticipates Q4 revenue to be $37.5 billion, with a temporary moderation of gross margins to the low 70s during the Blackwell product ramp. However, they expect a return to mid-70s margins shortly.

InvestingPro Insights

NVIDIA's robust market position and growth trajectory, as highlighted in the article, are further supported by real-time data and insights from InvestingPro. The company's market capitalization stands at an impressive $3.56 trillion, reflecting its dominant position in the semiconductor industry. NVIDIA's revenue growth is particularly noteworthy, with a staggering 194.69% increase over the last twelve months as of Q2 2025, aligning with the strong demand mentioned in the article.

InvestingPro Tips indicate that NVIDIA has a perfect Piotroski Score of 9, suggesting strong financial health and operational efficiency. This score, combined with the company's impressive gross profit margins and analysts' anticipation of sales growth, reinforces the positive outlook presented in the article. The company's ability to maintain dividend payments for 13 consecutive years also speaks to its financial stability amidst rapid growth.

It's worth noting that NVIDIA is trading near its 52-week high, with a significant price uptick of 52.97% over the last six months. This performance aligns with the increased price target set by Baird and the ongoing demand for NVIDIA's products in data center modernization and AI applications.

For investors seeking a more comprehensive analysis, InvestingPro offers 22 additional tips for NVIDIA, providing a deeper understanding of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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