These Trends Bode Well For Nvidia, Microsoft

Trip Chowdhry of Global Equities Research holds an Overweight rating on NVIDIA Corporation NVDA's stock with a 12–18 month price target of $125 given strong trends seen both in the company and on a macro level.

According to Chowdhry, Microsoft Corporation MSFT Azure is doubling the size of its GPU farms, re-shaping scale-out applications by implementing Cognitive Tool Kit (CNTK) based intelligence to its platform and applications.

This is notable because Microsoft's customers are running their Nvidia GPU at full-allocation, which implies that customers are running out of Nvidia's GPI capacity within Microsoft's Azure cloud.

Meanwhile, Microsoft is doubling the size of its Nvidia GPI clusters on expectations of a surge in demand to run machine learning and deep learning technologies and capabilities.

Strong Trends For Nvidia

Chowdhry added that Azure could double the size of its GPU farms, which implies that Nvidia's business is "rock-solid."

Chowdhry continued that two strong trends are going to benefit Nvidia as soon as August and come from two different sources: 1) upgraded revenues from Nvidia's K-Series and M-Series into its P-Series Gpus and 2) as previously noted, the doubling of the size of Microsoft's Azure GPU cloud.

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