Buy-rated Nvidia's (NASDAQ:NVDA) price target was lifted to $500 from $472 per share by Jefferies analysts in a note to clients Tuesday.
The firm hosted NVDA's CFO, Colette Kress, at the Nasdaq Conference. The analysts told investors that artificial intelligence (AI) is extending visibility for Nvidia and creating a software opportunity for the business.
Analysts said that Jefferies expects demand to be sustained beyond 2Q23 for Nvidia. "NVDA noted that it is seeing diverse and 'astounding' interest across CSPs, consumer internet, enterprise, HPC, and supercomputing customers with visibility having improved and better than historical visibility with generative AI able 'to fuel growth for several years,'" they wrote.
"Importantly, NVDA highlighted that upside has come from 'sheer volume' (unit growth) rather than just ASPs, with continued interest for the A100 architecture keeping A100 demand strong, at least in near term."
Meanwhile, Kress revealed that Nvidia believes there are three key incremental software monetization opportunities, such as NVIDIA AI Enterprise, a package of essential operating system tools for implementing AI.
In addition, they pointed to Omniverse, its platform solution for the creation of digital twins and 3D designs, and Auto for ADAS.
"Auto pipeline is ~$14 billion with 'good portion' of that from SW revs from Daimler and JLR deals. SW revs in hundreds of millions of dollars today but NVDA views SW purchases as 'hand in hand' with infrastructure purchases going forward," explained analysts.