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“While we do recognize our valuation framework for NVDA is aggressive, as our $375 price target is based on 31x LT earnings power of $12, we believe NVDA’s outsized share position and ability to monetize growth in generative AI at 70%+ GM should warrant a meaningful premium vs. its semiconductor peers,” the analysts wrote.
Nvidia is scheduled to report first-quarter results and hold its conference call on Wednesday evening. Its results are highly anticipated and will be closely scrutinized, but overall near-term performance may take a back seat to opportunity in artificial intelligence.
The analysts explained, “While supply is likely to limit more meaningful NT upside for NVDA data center GPUs including both the A100 and H100, and the disappointing launch of the RTX4070 could result in a modest miss in gaming, we anticipate investors will look through these concerns, as we believe NVDA represents one of the best positioned companies in semis this year given: 1) its dominate positioning in generative AI; and 2) multiple new product cycles across both data center (H100) and gaming (RTX40).”
