Nvidia Stock at $150? Here's What One Analyst is Predicting | Nvidia Stock | NVDA Stock | NVDA

this comes as earnings for some of nvidia's biggest customers those large cap Tech names have been a bit mixed our next guest though seeing some opportunity saying that the volatility represents a reason to buy joining us now we want to bring in antoan shakai ban he is a technology infrastructure Analyst at New Street research anine it's great to have you here so it looks like you recently upgraded Nvidia to a buy you've got $120 price Target on the stock and this comes at a time when it seems like many investors are still waiting on the sidelines with when it comes to Nvidia what makes you bullish at this point thanks Shan for having me so yes I would say that first of all since the peak of June nvidia's stock has pulled back by nearly 30% uh so that's underperforming most other semiconductor stocks that are exposed to Data Center Ai and reality is that you know even despite the concerns the recent concerns on on the company you know the Blackwell uh delay concerns around macro we still expect Nvidia to dominate the data center xpu market and um we see in-house xus doing well as well you know like companies like um Amazon uh Google are developing their own in-house xpu we also see alternatives to Invidia gpus like amd's gpus also uh ramping but we expect Nvidia to remain dominant in a market that is growing very very fast um and so I would say that uh we see little downside to expectations for nvidia's data center revenues we see little downside to valuation given the stock is now trading below the the trough multiple of the 2018 2019 down cycle um and so that makes it a very good investment at the moment I want to talk about what we've heard from some of nvidia's biggest customers as shaa was mentioning you've got Microsoft meta alphabet and Amazon contributing about 40% of nvidia's overall revenue and that's according to Bloomberg estimates if Wall Street was frustrated by the AI Roi story that we heard from those four big Tech names that I mentioned couldn't that hurt Nvidia too yes so I think the right way to look at it so yes you mentioned 40% of total revenues Nvidia actually also discloses you know that the large uh cloud service providers uh represent you know about half of their of their data center uh sales um if you look at how much capex for the top four hyperscalers is set to grow uh this year and next year and you unpack that you know between investments in AI investments in traditional infrastructure well it's true that we still need to see a bit further revisions to what consensus is expecting for capex growth next year to make room for NVIDIA to be able to meet expectations but uh not that much revisions maybe 10 15% actually um and uh yes of course uh whether capex can keep growing at such a pace Beyond 2020 2 is a question mark it will depend on the pace of adoption of generative AI powered use cases it will depend on the monetization of all the Investments made over 2023 2025 but reality is that even if we conservatively Model A significant slowdown in investments in 2026 2027 by these these Giants that still makes room for as the week began investors were fleeing to safety throughout the globe from the markets growth stocks that had experienced the the largest runup are often the most severely damaged stocks in any sell-off Nvidia is a manufacturer of cuttingedge chips the market has recovered somewhat this week but the stock that was riding High has now dropped by almost 25% from its all-time high closing price in mid June however a Wall Street expert believes that investors have a fantastic chance as a result of the decline Nvidia shares according to Oppenheimer analyst Rick Schaefer's most recent research note if he is correct in his prediction that Nvidia stock would hit $150 a share investors might profit by roughly 50% rumors that a flaw in nvidia's next Blackwell chip will postpone its release later this year intensified The Dumping of the company's stock over the weekend when it comes to artificial intelligence AI initiatives clients that want the most processing power possible are likely to be drawn to that chip and its design if those rubers are accurate however schaer of Oppenheimer believes investors shouldn't be alarmed this is because to the fact that Nvidia will leverage any delay in releasing Blackwell to help meet the overwhelming demand for its current h100 ey chips schaer stated in his research note that nvidia's competitive position is still strong and that a small delay won't result in any share losses in our opinion Nvidia is in the greatest position to profit from Full stack a hardware and software Solutions schaer's remarks are entirely logical there appears to be a significant discrepancy between vidia's present chip capacity and the increasing demand although Rivals will contribute to somewhat closing that Gap Nvidia ought to be content to keep selling its current CPUs Blackwell is only going to increase those sales even more because of this the Nvidia stock correction presents a buying opportunity with all these developments under consideration and analyst predictions we'll talk about Target projections and advice in today's video so make sure not to miss out however before you do if you'd like to stay up to date on VI's most recent updates and the most recent news from the stock market you can subscribe to our Channel we publish daily updates about the biggest shifts in Market catalysts so click the Bell icon button to ensure you don't miss the most recent updates all right back to today's video Nvidia and other chip stock surge over 5% Thursday is Tech let a market rebound joining us now with more on the sector is BFA Security senior research analyst VC Arya VC great to have you with us and I know we highlighted the the 6% gain that Nvidia saw yesterday but if you take a look for the week Nvidia is actually underperforming uh the Philadelphia semiconductor index uh you know nvidia's down about 2% and the socks is up almost three and there have been doubts since probably that June 20th key reversal date where where Nvidia shares hit a new high and then close on lows um where the stock has really been struggling so where do you come out on on how the stock is valued uh and if there was just too much hype in the stock he good morning Melissa so um I think practically speaking um whether it's Nvidia whether it's the rest of the semiconductor space we could stay uh volatile until Nvidia reports later uh this month and we have the required reset in any delays associated with their new uh black pip which I think is is actually not that uh big uh but if we take a step back uh we have to sep at what's happening in the market from the fundamental side I think what's happening in the market and the volatility uh has nothing to do with uh semis but this is where all the gains were uh because AI was the best game in town um and that's why these companies uh saw the most draw down also during this volatility but let's look at the fundamental side number one every one of nvidia's top customers whether it is Amazon whether it is meta or Microsoft or Google they all said they are investing more not less in AI number two if you look at nvidia's top supplier Taiwan semi they had very strong Outlook in fact this morning they gave very strong guidance uh for their uh last month of results and uh number three if you look at nvidia's top system partner super micro I I know they got dinged on the margin side but if you actually look at the uh sales growth that they showed uh for the next uh 12 months up 90% that is two times what people are modeling for nvidia's growth and Nvidia usually outows them so I think the fundamentals are still extremely uh WR but you know the market is going to go through its volatility uh which we think should subside uh By the time Nvidia reports its results because the fundamentals are very strong and the final point on uh valuation if I take the mag 7 outside of Nvidia they are trading and the broad Market uh it's trading roughly two times its earnings growth for next year Nvidia is trading 8 times right so it's trading less than 30 times for over 35 to 40% earnings growth so I think fundamentals are strong and valuation is still very the shine on Nvidia appears to have worn off the stock has dropped about 25% from its peak which was reached just a few weeks ago a significant shift from July occurred when about one-third of Wall Street analysts pauled by LSG in August said they no longer advise purchasing video stock it may be time for some investors to move on to more promising opportunities I think the reverse is true what makes Nvidia a good investment even after its sharp decline ask Amazon Microsoft meta platforms and alphabet the parent company of Google at their most recent quarterly updates the four leaders in artificial intelligence a all sang the same tune additionally Nvidia stockholders ought to enjoy their musical selections on July 23 alphabet released its results for the second quarter during the key2 earnings call CFO Ruth poret stated that the company Capital expenditures were primarily driven by investments in our technical infrastructure with servers accounting for the greatest portion followed by data centers she also stated that kex in the following quarters of this year would be at or beyond the 12 billion mark from the first quarter when questioned about the high levels of investment in AI infrastructure CEO Sundar Pai responded in response he said even in situations when it turns out that we are overinvestigation is far higher than the risk of overinvestigation and Cloud models next meta released its key to report we presently anticipate considerable kex increase in 20125 as we invest to support our AI research and product development initiatives CFO Susan lie said in the key to call so what does this really mean for nidia's 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 AI remains worth watching segment for Global Investors in 2024 but how do you keep up with the AI sector and others that you may interested in I recommend trying Mumu a sponsor of today's video some features to discover stocks with investment potential has blown me away you can use the industry chain to find companies throughout the entire AI sector or use the stock screener to filter stocks according to your investment strategy having the option to set parameters like industry market indicators Financial indicators technical indicators and more ultimately discover potentially undervalued stocks and those that appear to show buy signals to help inform your strategies in an effort to capitalize on ad related opportunities at the same time Mumu is one of the cheapest trading platforms I found it offers 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quarter two quarters whatever yeah so if we look at demand for nvidia's Hopper product uh which is uh the product before Blackwell demand for that is off the charts right now and that's what we heard from Super Micro you know they got it well above consensus and a lot of that is actually based on the hopper product because we just have had this Spirit of insane Supply constraints in the industry and just because Blackwell is delayed a little bit doesn't mean the supply constraints have gone away so any customer who can put their hands on Hopper is still able to buy that product now when it comes to to Blackwell there are many different versions of uh Blackwell the most uh extreme versions that are in the highest most densest version of the rack scale architecture they are perhaps pushed out by a quarter or so uh so that I think can be reflected in uh numbers but uh when it comes to other versions of Blackwell I do think that they will start to ship some Blackwell uh later this year but the key point is that demand in combination of Hopper and Blackwell I still think is extremely strong on August 1 Amazon released its key to results CFO Brian olavsky stated on the company's results call we expect Capital Investments to be higher in the second half of the year he went on we continue to see strong demand in both our non-generative Ai workloads and generative AI workloads so the majority of the spend will be to support the growing need for ads infrastructure Amazon Microsoft meta and alphabet all intend to keep making significant investments in infrastr structure linked to AI that's fantastic news for NVIDIA since it most likely indicates increased sales of its gpus or Graphics processing units it's true that these large corporations use some of their own AI processors Google has its own specialized AI accelerator called Trillium aera is offered by Microsoft the metat trining and inference accelerator or mtia is meta's proprietary artificial intelligence chip during its key2 call Amazon highlighted its tranium and inferentia chips but let's be clear about this these Titans of AI mainly depend on Nvidia that is not going to alter in the near future it's probable that Reliance on Nvidia will soon grow the Blackwell GPU architecture from Nvidia is far superior to anything else available upon the new Blackwell based chips release Amazon alphabet Microsoft and meta are EXP expected to be among the first to obtain them Jensen hang the CEO of Nvidia has high hopes for Blackwell it might be the most popular product in the company's history he predicts I think he'll be proved correct and Amazon alphabet Microsoft and meow will all play a part in making it happen the information claim regarding a delay in shipping Blackwell chips because of a design defect May worry some investors other than confirming that it anticipates a spike in production of the new chips in the second half of 2024 Nvidia has not responded to the rumor the report might be accurate but I'm not sure CFO Colette Crest stated during nvidia's May quarterly report that Blackwell will be made available to International Partners later this year but pitchy mentioned in alphabet's key to call that the most latest Nvidia Blackwell platform will be available on Google cloud in early 2025 however Nvidia should only see a little Blackwell delay overall the company's prospects shouldn't alter and if you pay close attention to what Microsoft Amazon alphabet and meta are saying those prospects ought to hold up rather well with all of these considerations Nvidia is unquestionably a great buy especially if you're looking to invest for the long term because the company hasn't reached its full potential yet what do you think about Nvidia stock is it a good buy at the current price please share your opinions with us in the comments section and don't forget to let us know what you think Nvidia is worth if you're interested in learning what other companies like Nvidia have been up to lately 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