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The analysts said they view the stock favorably, given the company’s dominant position and multi-year runway in transforming the more than $1 trillion in traditional global data centers to AI/accelerated compute.
“After last quarter’s shock-and-awe report, we expect the sentiment to be bit more measured. Demand isn’t the issue, its supply (packaging, memory) and importantly the pace with which US cloud service providers (CSP) are able to set up genAI compute instances,” the analysts wrote.
“Overall, we expect: 1) F2Q (Jul) sales to be inline/modestly ahead better than guide $11bn (+64% YoY), including around $7.8-8bn in data center, and 2) F3Q (Oct) sales to accelerate to up +100% YoY towards $12-$12.5bn (bull-case $13-14bn), including data center sales around $8.5-9bn (bull-case $10-$11bn,” they explained.
The analysts concluded that investors will be looking for Nvidia to provide clues on the sustainability of its elevated forecasts “considering a lukewarm US CSP capex environment.”
