Nvidia Is 'Building The Industry Standard' For AI; Analyst Lifts Price Target To $250

Analysts at Evercore ISI hosted some of NVIDIA Corporation NVDA's most senior executives, including CEO Jensen Huang, with a main takeaway being that the company is "building the industry standard for artificial intelligence. Accordingly, analyst C.J Muse maintains an Outperform rating on Nvidia's stock with a price target boosted from $180 to $250.

Nvidia earned itself a first mover advantage in the AI space through a unified GPU architecture and a system level approach, Muse commented in his report. As such, its technological expertise is considered to be "nearly impossible to replicate" to the point where its status as a leader today will remain in place over the long term.

But Nvidia investors looking for a near-term catalyst may be given one as soon as October, the analyst said. Wall Street's near-term expectations, especially in its Data Center and Gaming segments, are looking very conservative. Specifically, consensus estimates is calling for just a 9 percent quarter-over-quarter growth in data center revenue in October and overall gaming to grow 6 percent quarter-over-quarter.

"So while conversations were clearly focused on the long-term opportunity for NVDA, our sense is that a Volta-led re-acceleration in Data Center, more normal seasonal patterns in Gaming, and sustained Ethereum led crypto-currency GPU demand suggests upside into the October Q," Muse wrote.

With that said, a positive earnings momentum should continue through October's earnings report and likely beyond, which will supports upside for the stock in both the near term and longer term.

Bottom line, the artificial intelligence sector is merely in the very early stages and Nvidia is "creating THE AI computing industry standard," the analyst concluded.

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Image Credit: By yoggy0 from Yokohama, Japan (SIGGRAPH Asia 2009) [CC BY 2.0], via Wikimedia Commons