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The results, reported late on Wednesday, were driven by an artificial intelligence (AI) boom-fueled demand for its chips, and will boost its position in the prized trillion-dollar market value club it entered earlier this year.
More than 20 brokerages raised their target price for Nvidia post the earnings update, according to Refinitiv data, with Elazar Advisors being the most bullish at $1,600.
That represents an over three-fold rise from last close of $471.16.
Along with Rosenblatt Securities at $1,100 – they are the only ones to have targets above $1,000 for Nvidia. The chipmaker’s median price target is $567.
Nvidia has been the biggest beneficiary of the rise of ChatGPT and other generative AI apps, virtually all of which are powered by its graphics processors.
Its shares have tripled in value this year, adding more than $700 billion to its market valuation and making it the first trillion-dollar chip firm.
“Everyone has been looking for ways to play AI that aren’t as expensive as Nvidia given the run this year. However, in our opinion NVDA itself remains the best way to accomplish that,” said Bernstein analysts led by Stacy A. Rasgon.
“Given the magnitude of earnings revisions, we suspect the stock will still come out cheaper than it was going into the print.”
The results are also seen keeping a Wall Street rally alive, with futures tracking the tech-heavy Nasdaq 100 jumping more than 1%, while S&P 500 futures rose 0.7%.
“Nvidia news has a boosting effect on technology stocks, if only by confirming that all the talk around the AI-craze was not empty, after all,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
A lot rested on Nvidia posting strong results, as most of the S&P 500‘s over 15% year-to-date gains have come from the AI-driven rally in Nvidia and other Big Tech stocks.
Analysts had warned that if the results beat wasn’t big enough, that could trip the rally as investors would question lofty valuations on tech stock in the backdrop of rising yields. [US/]
Elsewhere, shares of Taiwan Semiconductor Manufacturing Co (TSMC), which supplies to Nvidia, rose 2.2%.
European chip companies also rose, with ASM International (OTC:ASMIY), BE Semiconductor and Aixtron gaining nearly 2% each. Europe’s tech index was up 1.1%, among the top gainers in the regions. (This story has been refiled to correct the spelling of ‘Nvidia’ in paragraph 14 and ‘Bernstein’ in paragraph 8)
