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The upgrade follows the Nvidia CEO’s keynote at the annual computer expo, Computex, in Taiwan over the holiday weekend, where it made several product announcements.
The analysts declared that the “key product announcements at Computex only further bolster NVDA’s AI position, benefitting from early-mover advantage and strong execution.”
They also stated that Nvidia’s networking pipeline enhances AI monetization.
“AI networking could be a $10.7bn total addressable market (TAM) by CY27E vs. just $2bn last year, based on forecasts by the 650 Group,” said the analysts.
“Indeed, AI upside is driving strong performance YTD (+180% vs. SOX +40%), but we believe we are only at the start of the story,” they added. “Only ~15% of cloud servers are accelerated today, becoming more essential as GPUs are required for proper training of LLMs (large language models).”
“Plus, NVDA holds formidable inferencing portfolio (L4, L40, H100 NVL) – a market 2x-3x larger than training, and essential in implementation/use of trained AI models. In-turn, we continue to see long-term (CY27) EPS power of $20 – which could be conservative with growing data center portfolio driving margin expansion.”
