- Truist Securities analyst William Stein maintains NVIDIA Corp NVDA with a Buy and raises the price target from $289 to $332.
- Massively parallel and heterogeneous computing for AI is gaining steam, and NVDA's leadership is becoming more undisputable.
- The analyst recently learned of an uptick in demand for Datacenter (AI) GPUs from his ongoing dialogue with NVDA's supply chain component suppliers.
- The ever-increasing demand to build generative AI tools like ChatGPT fueled the upside likely to translate into revenue and margin upside in the CQ1 (April) result and CQ2 (July) outlook.
- While he would anticipate excitement around ChatGPT has prompted incremental demand for hardware, software, and services for these new generative AI systems, he expected this would be more obvious in indications for H100 (latest-generation Hopper architecture systems).
- Instead, the upside indicators come from A100 (lagging-generation, Ampere architecture systems) and A800 (the Ampere architecture GPU for the China market).
- The analyst raised his datacenter end market sequential sales growth for Q1 and Q2. He also boosted CY23 and CY24 datacenter end market growth along with the corresponding EPS.
- The analyst is uncertain whether the uptick in demand for A-series GPUs is due to a cost-benefit performance analysis favoring A-series over H-series or if it relates to overall upside demand or ongoing supply chain constraints for H-series GPUs.
- Stein sees a positive gross margin from written-down inventory sell-through and the H100 ramps.
- Price Action: NVDA shares traded higher by 0.74% at $287.83 on the last check Wednesday.
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