On Thursday, Bernstein, a prominent financial research firm, upgraded the price target for NVIDIA (NASDAQ: NASDAQ:NVDA) shares to $1,000 from the previous $700, while maintaining an Outperform rating on the stock. This revision follows NVIDIA's impressive fourth fiscal quarter results which surpassed consensus estimates, with revenues reaching approximately $22.1B and earnings per share at $5.16, compared to the Street's expectations of around $20.4B and $4.60 respectively.
The company's performance was particularly bolstered by its Datacenter business, which hit new record levels, approximately $18.4B, exceeding the Street's prediction of about $17.2B. NVIDIA's forward guidance also indicates a positive trajectory, forecasting first-quarter revenues of around $24.0B and earnings per share of approximately $5.40, again outpacing Street projections which were set at $21.9B and $4.93.
NVIDIA's management is optimistic about the potential for Datacenter revenue growth in the calendar years 2024 and 2025, driven by the increasing demand for accelerated computing and generative AI, along with the strength of their product offerings. The company's financial success is attributed to the robust demand that continues to grow as they introduce the Hopper supply, and they anticipate supply constraints to persist as next-generation products are rolled out throughout the year.
Despite modest sales figures in China for the quarter and the guidance provided, the firm sees this as an opportunity for growth in the second half of the year, especially as new products are yet to be fully introduced in the region. NVIDIA also reported that around 40% of its datacenter revenues are allocated to inference, countering concerns about their market position in this area.
The company's networking segment remains exceptionally strong, and with new products like the H200 and B100 set to launch, presumably at higher price points, the future looks promising. Bernstein's analysis suggests that the current $1T installed datacenter infrastructure could double to $2T over the next five years, indicating the potential for significant growth for NVIDIA.
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