Why KeyBanc Reaffirms Nvidia as Overweight with $180 Target | Nvidia Stock | NVDA Stock | NVDA

why remain bullish on Nvidia yeah well I think there's a lot of reasons to still like the company I mean they've driven accelerate compute about a THX over the last 10 years and they continue to be the leaders in the space um and AI is right now just too important of a area to to let up the gas and so I think that the large companies will still spend I think there's a tension of like just you know what does spending more mean and does that meet expectations and that's what the Market's really going to be focused on going forward and so I like there's a lot of great reasons to like the stock long term um I think that at the same time you have to remember that semiconductors are very cyclical and they're also secular so um I think that's part of our job to navigate uh navigate the environment so basically brace yourself a potential short-term volatility but longer term you're still bullish on money coming into the likes of Nvidia but does it broaden out at the moment it's felt like Nvidia is the only picks and shovels game in town you started seeing broadcom doing relatively well on some AI wins what do you make of Nvidia really reigning the main place to win on AI yeah well I think that the reason why Nvidia has been so good um in terms of it's because it's a platform right it's not just a chip and so they have a big ecosystem with lots of developers writing on their code and Cuda and so it's all built um like an ecosystem platform and so I think that's why it's such a defensible business um and you know there it's available every everywhere is ubiquitous on the cloud you can have it on PR um and they got great support for their for their chips and so I think that's largely the reason and now I think it is it could be changing in terms of the complexion going forward is more concentrated among the hyperscale players and they're very sophisticated buyers of chips they can do a lot of their own software and so I think there will always be a balance between the hyperscale making their own chips with like significant volumes like you've seen Google with their TPU that's very aimed at search and so I think that will continue you know in other ways and so I think they can coexist I I like that point that you've been making and we were just hearing how data Tre is seeing the same thing that there is a willingness on a capital expenditure perspective coming from hyperscalers you were in a number of those hyperscalers Microsoft meta for example alphabet and meta seemed to manage to Nuance the argument of why they put money in there whereas alphabet people were worried about just spending capex at all costs what do you make of the hyperscaler decision to keep on putting money in yeah I think that Mark did a nice job of kind of um Illuminating why he's spending so much in AI like with personalized chat Bots and like how that can go through the platform uh you know I think that you shouldn't count Google out at the same time and they have a lot of AI expertise they've been leaders in the field um they have great chips as well and so you know I think that it's too early to call who's going to be the winner or loser they all have big platforms and user bases where they can scale their AI Investments and so um you know it's it's I think it's too early to call like who's going to win or lose but at the same and at the same time they all have really great businesses Barclay's analysts caution that nvidia's impending earnings report which the market is anxiously awaiting may act as a reality check for the larger market especially in the tech sector the bank emphasizes the importance of nvidia's earnings which are scheduled for release next week in sustaining the momentum behind the AI and Tech investment story that has dominated the market since late 2022 in a client research report the first quarter of 2023 saw an viia post record earnings which added to the excitement surrounding artificial intelligence AI which became more popular after Chachi PT was introduced in November 2022 barklay stated that these outcomes provide verifiable proof that the AI theme might result in significant Revenue increases since then nvidia's profits have continuously exceeded forecasts propelling the IT industry and the overall Market Barclays warns that nvidia's next report could be a letdown if it doesn't show a positive beat and increase which could have broader Market ramifications Barclays is keeping a close eye on Federal Reserve chair Jerome Powell's speech at Jackson hle concurrently the market has already priced in a doish position from the Fed so it is anticipated that the speech will fine-tune policy expectations the bank observes that while the speech might not significantly change the present Market picture it might have an impact on short-term changes in rates and Equity prices given that four rate cuts are priced by AAS swaps before Year's End although the FED is moving toward easing policy Barclays points out that current market prices already reflect a large portion of this doish stance because of this the Jackson Hole incident and invidious Financial results may be crucial in deciding whether the market keeps going in the same direction or needs to pause for a while a head of the chipmakers July quarter earnings report evercore isi analysts recommended investors to purchase Nvidia shares emphasizing that worries over Blackwell delays in the past are overdone if you want to keep up with nvidia's latest updates and keep up with the stock market latest news you can subscribe to our investing tutorial Channel as we post daily updates about the biggest changes and Catalyst in the market so click the Subscribe button if you don't want to miss the newest Market updates now back to today's video e Bank Capital markets reiterating its overweight rating on Nvidia the note highlighting the delay of the Blackwell chip will have no impact on near-term results and joining us now as the analyst behind that note John Vin equity research analyst at KeyBank Capital markets John always good to have you on the show so Nvidia uh reports next week John and these reports we're getting of of NextGen Blackwell chips getting delayed John that that is front and center how should investors think about that issue John yeah I mean a couple things um that we're highlighting today is you know there's there's going to be no near-term impact on that Blackwell delay in terms of their Q2 results and Q3 guidance you know Blackwell was originally only going to start ramping maybe towards the end of the July quarter uh contributions into the October quarter were really supposed to be very modest and what we're kind of hearing from from customers is that a lot of that Blackwell backlog has largely been backfilled with additional incremental Hopper orders um you know as you kind of get into Q4 for these guys you know we think there's going to be sequential growth and still very outsized demand for Hopper gpus and then then you're going to start to see some contribution from from blackbull revenues in the Q4 time frame but that's all going to be incremental on top of kind of their Hopper uh Revenue base John how is the hopper Supply uh holding up right now if especially since they're you know if they're migrating some of what would have been uh Blackwell orders to Hopper orders are they keeping up with that yeah um Supply is really not uh an issue at this point in time I think a quarter ago you started to see lead times for Hopper gpus actually start to normalize there's actually a lot of a lot more advanced packaging capacity coming online here in the second half so um Supply is really not no longer going to be a constraint here as we go into earnings with with Nvidia let's say John the print comes in as you expect I know that's a big if but let's let's say that happens on the call John what would be your big questions for for Jensen Wong you know I think the big question is you know how is how is Black Wall doing right you know what's your expectations in terms of the timing of the ramp and you know more um you know I think I heard your last call about you know cence and customers moving to system level Solutions um you know the big thing with Nvidia with Blackwell is they are moving to a system level rack level uh scale architecture with gb200 uh that's the big question mark the concerns there is is that going to be able to ramp on time and and ramp in meaningful volumes for next year those would be the key questions that I want would want to ask the Investment Bank highlights a 20% quarter over quarter increase in hyperscale capital spending in Q2 2024 as evidence of the continued strength of demand for NVIDIA systems it is anticipated that kex will increase by an additional 8% and 10% in key3 and key4 respectively according to rumors that surfaced earlier this month nvidia's highly anticipated Blackwell system which features its next Generation AI chips might experience a 3-month delay the disclosure sparked a recent selloff nvidia's shares because it made investors question whether the company's upward trajectory could continue upon reviewing the three prior Nvidia product disruptions in 2008 2022 and 2023 evercore analysts draw the following conclusions although a negative announcement might cause a short-term 5% 10% decline in the company's stock Nvidia has a history of quickly developing alternative Solutions additionally in the event that a delay materializes we think demand is so strong even at tier 2 and tier 3 cloud service providers and Enterprises that even with Blackwell's push current generation Hopper solutions would be purchased furthermore they note that nvidia's stock has recently seen two notable Corrections totaling more than 50% one in the second half of 2018 which happened a corner ahead of peak capital expenditure and at a price to earnings P/E ratio of 38 the other in 2021 to 2022 which happened four quarters ahead of peak capex and started at a P/E of 67 given that Peak capex is expected to occur in the fourth quarter of 2025 and that nvidia's current P/E ratio is 39 analysts do not expect a substantial stock sell off before mid 2025 all things considered the evercore team still regards Nvidia as its top tectonic shift in Computing pick one that is poised to reap up to 80% of the benefits of the parallel processing age according to analysts the darling of artificial intelligence AI might earn more than $10 in earnings per share EPS by 2030 and eventually rise to 10 to 15% of the S and p500 index's weight in the short run evercore increases its projections for nvidia's third quarter and 2024 and lifts its Target price from $145 to $150 so what does this really mean for Nidia stock let's find out but first if you made it this far into the video thank you these videos take a lot of effort and time to make so if you enjoyed them please hit the like button subscribe to the channel this goes a long way in helping us grow that said back to the video you've been great at articulating why you believe AI is such a winning story but Juck suppose that with the overall macro picture here we see the market get hit on the fact the WEA or not we will have interest rate Cuts how much do you factor that in in the here and now when you're looking at a portfolio allocation yeah I mean it's definitely an area that you can't ignore um the macro is super important you have to be aware of like what's going on top down at the same time I think that we kind of take it stock by stock and look at where expectations are like the likelihood that they beat expectations how well the company is position so no matter you like what direction the macro is going like you should be able to like create Alpha um either way just by relative selection of stocks and so um you know what I think about kind of Nvidia like a lot of it you know is it's going to be a really big print here like we've never had this amount of debate I think in terms of um you know are we kind of near the CLE Peak or is it going to continue and so um you know we do a lot of fundamental work to understand like kind of where the products are positioned and and how to think about the setup of the stock look what you're managing the Science and Technology fund does it suddenly Amaze you that the whole world now thinks Nvidia is a macro moment its earnings might dictate the rest of the benchmarks yeah it's a phenomenal moment I mean you think about it um the stock has has just been amazing um I I remember I started covering it about seven eight years ago and you would never have thought it it would be three trillion so everybody has like underestimated the the company um you know through like multiple cycles and so it's been you know phenomenal because you know they offer so much value um and and like we've seen this like kind of AI vision of how Celler compute play out and so I think everyone now recognizes it and so you know it is it is pretty fomal and I think that part of the reason why Nvidia is so important is because there are a lot of AI multipliers through the economy and there's a lot of market cap creation because Nvidia is doing well and there is this like kind of idea that long-term value creation productivity driving through the economy so I I think it's a big moment for the market for sure and so we're we're excited to see what happens next the stock price of Nvidia could move in one of two ways following its results release enormous profits or losses that may sound completely ridiculous and apparent but that's what the most popular stock in the investing world is up against when it trades on a market capitalization of almost $3 trillion the founder of capital Eric Jackson predicted that investors may experience a seesmic shift following nvidia's earnings release between now and the end of the year nvidia's valuation might treble again according to Jackson but CEO Jensen hang will need to elay worries on two fronts if he wants nvidia's stock price to rise in response to earnings as jacken believes he has to First give the impression that the rumored holdups with his new Blackwell AI chip are only brief second there is still a high need for a chips if he succeeds in doing all of that nvidia's market capitalization might reach $4 trillion there is no doubt about that during the aibu Nvidia has been the most closely followed stock it's understandable why since the beginning of 2023 Nvidia has increased its Market worth by over $2 trillion placing it in an elite group of Highly valuable corporations that is only surpassed by Apple and Microsoft but in addition to the business's accomplish ments in spear heating the revolution in AI chips it also has a modest Investment Portfolio but a powerful business like Nvidia might make a big difference with its stock Acquisitions arm Holdings a company specializing in CPU architecture with whom Nvidia collaborates closely is its largest holding the news of its acquisition of SoundHound ey shares in the first quarter caused the stocks value to SAR during the second quarter Nvidia purchased a single shares in serve reu otics a company that creates robots that distribute food in public areas when word leaked that Nvidia had bought 3.7 million shares in the second quarter which is now worth around $4.3 million or 10% of the company's market value the stock shot up 99.6% during heavy volume trading founded in 2021 serve robotics is a small Ai and robotic startup that employed just 67 people at the end of 2023 prior to joining Yuber as CEO adley kashani served as vice president of Postmates an OnDemand meal delivery service before that he was the chief technology officer and co-founder of a smart home technology that generra a generator manufacturer purchased serve robotics offers autonomous delivery cars that you may have seen on the street eats and Uber Eats teamed up to test robot delivery in Los Angeles yum br's Pizza Hut Shake Shack and 7-Eleven are among seres customers Uber is not just a significant client but also an investor in the business as of right now serve robotics is essentially simply a startup revenue for the second quarter was $468,500 more than it was for the same period last year the average number of robots making daily deliveries was 48 daily active robots for the company in the second quarter of this year which was more than twice as many as there were in the corresponding period of the previous year 23 by the end of the first quarter of the following year it hopes to have deployed at least 250 more robots in Los Angeles by the end of 2025 it also plans to have 2,000 robots working for Uber Eats which it estimates will bring in $6 million to $80 million a year the field of Robotics which includes delivery Ro robots is new given that there would be no need for human labor in the current food delivery system if a firm such as yber to develop robotic meal delivery the addressable Market appears to be huge it's also a testament to the company that Nvidia the premier chipmaker and ride sharing platform and Yuber our investors these connections should give the company an edge over other robots companies possibly it will allow for additional Partnerships with Uber and Grant serve first dibs onvia chip and Technology serve robotics has a great deal of upside potential because of those ties and its leadership position in a developing technology