GS Boosts NVDA Target, Stock Soars +4.35%
On Mon, 19 Aug 2024, $NVIDIA Corp(NVDA)$ shares traded higher in afternoon after analysts at $Goldman Sachs(GS)$ kept Nvidia on a key list of recommended stocks, as it heads into its highly anticipated Q2 2024 earnings on Wed, 28 Aug 2024.
Shares of Nvidia, US market's star performer in 2024 has been hit hard by the global market turmoil tied to the so-called yen-carry trade in early August.
Good news is Nvidia has since staged an impressive +20% recovery on the back of investor bets that its staggered line of AI chips and processors will hold their commanding market share well into 2025 and beyond.
Investors will get an updated view of that thesis next Wednesday, when Nvidia reports its earnings and near-term outlook.
The Blackwell News.
Investors should be focusing on the impact of reported delays to its new line of Blackwell processors, which are set to begin shipping early this autumn.
Blackwell processors have been touted as faster, cheaper & more efficient than Nvidia's H100 Hopper predecessors.
But based on a report from The Information in early August, delivery of the Blackwell chip could be delayed due to design flaws,
Analysts had expected Blackwell to begin generating revenue for Nvidia from Q3 2024 and find their way into global customer data centers by Q4 2024.
Goldman Sachs analyst Toshiya Hari has:
Reiterated a “Buy” rating for Nvidia.
A $135 price target on its run up to earnings release.
Strong conviction that Nvidia remains a compelling investment.
Goldman Sachs Assessment.
GS analyst, Toshiya Hari has shared:
Delay in Nvidia's Blackwell (next-generation GPU architecture) could lead to some near-term volatility in fundamentals.
However, we expect management commentary and supply-chain data points over the coming weeks would lead to Nvidia’s higher earnings in 2025 and beyond.
Most important, Mr Hari believe demand across (a) large cloud service providers and (b) enterprises remain strong.
Nvidia's competitive position in AI andaccelerated computing remains intact.
From a stock perspective, we believe the setup for Nvidia is constructive, with the stock trading at 42x [next 12 months] consensus earnings per share," Hari said. That's "a relative premium of only 46% (vs. its past three-year median of 151%), and our updated Bull/Bear framework indicates a favorable risk/reward balance."
Nvidia is a good stock.
With the stock trading at 42x what Nvidia is expected to earn next year, it is much lower than it has been in the past 3 years.
Although Nvidia is not cheap, the risk of buying it is worth the potential reward.
Nvidia May Statement.
In May 2024, Nvidia told investors that current-quarter revenue would rise to around $28 billion, a stronger-than-expected tally.
This assuaged investors' concern about a so-called air pocket created by the Blackwell launch.
Some had worried that customers would cancel orders for the older H100 chips and wait for the newer system processors to ship later in the year.
Nvidia Financial Facts.
For the 3 months ended in July analysts see Nvidia posting adjusted earnings of $0.64 a share with revenue rising nearly +90% from the same period last year to $25.6 billion.
On Mon, 19 Aug 2024, Nvidia was held back in early trading by news of $Advanced Micro Devices(AMD)$ $4.9 billion purchase of privately owned server maker ZT Systems.
Analysts regarded the purchase as expanding AMD's AI capabilities and its nascent challenge to Nvidia's market dominance.
My Viewpoints: (mine only)
The July and August debacle is definitely over for Nvidia.
Nvidia stock price has since recovered and is trending above its 200-day & 50-day moving averages. (see below)
On 10 Jun 2024, when Nvidia opened trading (after stock split completion), it was $120.37 per share.
On 19 Aug 2024, Nvidia ended the day at $130.00 per share.
Safe to say, it has continued to climb upwards.
Will it reach Goldman Sachs revised $135 per share price target ? I think we will know by next Wed, 28 Aug 2024 - and not a minute too soon.
Must Read: Click on below titles to access. Give a like & help to repost ok. Thanks.
Do you think Goldman Sachs’ analysis of Nvidia is accurate, in terms of demand and profitability ?
Do you think Nvidia will exceed the $135 revised price target by September 2024 ?
If you find this post interesting, give it wings! ️ Repost and share the insights ?
Do consider “Follow me” and get firsthand read of my daily new post. Thank you.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Pls "Re-post" so that more get to know. Tks! Rating is important (to me).
Consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!