As Nvidia Corp. is set to release its latest set of earnings after markets close Wednesday, one analyst has raised his price target on the chipmaker.
Bloomberg News reported Wednesday that analysts are expecting Nvidia’s second-quarter revenue to come in at around US$29 billion, more than double the revenue it reported a year earlier. Matt Bryson, a senior vice president at Wedbush Securities, said in an interview with BNN Bloomberg that he thinks ivida had a “very strong fiscal Q2” and will likely provide strong guidance for the third quarter as well.
“You look at Nvidia’s large customers, predominantly the cloud players Microsoft, Amazon, Google, they all spent more on capex in calendar Q2,” Bryson said.
“You look at the large server OEMs (original equipment manufacturers), Super Micro, Gigabyte, they all reported excellent numbers driven by AI server shipments. And when Super Micro was talking about their calendar Q3 expectations, they’re looking at shipping almost a billion and a half more servers.”
He also raised his 12-month price target on Nvidia in a note late last week to US$138 from $120.
“So my $138 is based on next year’s earnings. I’m using a mid-30s type multiple. Historically, Nvidia, the last few years, has traded on forward earnings in a multiple in the 30s, maybe a little bit lighter than where I am,” he said.
Bryson added that Nvidia is likely to provide an update on its Balckwell next-generation AI chip which had been expected to be released in the second half of the year.
“When Blackwell does come out, there’s a whole lot of demand for the new chips because they are more powerful. They allow the large customers to train these larger models,” he said.
Bryson said Nvidia typically only provides a one-quarter forecast and “Blackwell in my mind was never going to really have any financial impact on their October quarter.”
“I think the more important piece around Blackwell is simply what does management have to say about the delays? Do they reassure investors that any shifts are minimal in nature?”