The AI gravy train arrived right on time for NVIDIA's fiscal second quarter of 2024, delivering a whopping 101 percent growth in revenue on an annual basis. Wall Street is nothing but a collective encore around NVIDIA shares today, with one investment bank taking the lead in delivering plaudits.
As a refresher, NVIDIA reported $13.51 billion in quarterly revenue yesterday, with the company's data center segment accounting for $10.3 billion in sales.
“During the quarter, major cloud service providers announced massive NVIDIA H100 AI infrastructures. Leading enterprise IT system and software providers announced partnerships to bring NVIDIA AI to every industry. The race is on to adopt generative AI,” $NVDA CEO said.
— notreload (@thudderwicks) August 23, 2023
The real shocker, of course, was NVIDIA's blowout guidance. The company now expects $16 billion (plus or minus 2 percent) in sales for Q3 2024. For reference, consensus expectations for the quarter's revenue were pegged at just $12.61 billion before the latest earnings release.
This brings us to the crux of the matter. Rosenblatt analyst Hans Mosesmann has now raised the target on NVIDIA shares from $800 to a whopping $1,100, corresponding to a further upside potential of around 130 percent from the current price level. The analyst believes that most of the $1 trillion installed data center base will shift to accelerated computing to cater to generative AI models, creating a phenomenal upside potential for NVIDIA in the process.
At $500 pre-mkt, $NVDA cheaper this morning at 33.1x CY’24 EPS ($500/$15.10EPS) than it was yesterday at 39.2x CY’24 EPS ($471/$12 EPS) with higher expected future growth this morning. For reference, $TSLA at $240 pre-mkt trades at 49.8x CY’2024 EPS of $4.81. This is how most…
— Gary Black (@garyblack00) August 24, 2023
Interestingly, the GPU manufacturer's stock is trading at a cheaper multiple today despite further price gains. As noted by the Tesla permabull analyst Gary Black, at around $500 per share, NVIDIA's FY 2024 EPS multiple now computes at 33.1x, based on a full-year EPS estimate of $15.10. For reference, NVIDIA was trading at an EPS multiple of 39.2x yesterday, based on a $471 per share and a full-year EPS estimate of around $12.
When $NVDA opens tomorrow, it will be above a 100x return from Jan 1, 2015. It closed 2014 at $4.81 (split adjusted).
A 100 bagger in 8 years and 8 months.
$10,000 to $1,000,000A 700 bagger over the past 20 years. pic.twitter.com/CJzej1aTLf
— Chris Perruna (@cperruna) August 23, 2023
NVIDIA closed 2014 at $4.81 per share. At the time of writing, NVIDIA shares are trading at $480 per share, corresponding to cumulative gains of 9,879 percent! Of course, should the stock manage to realize Rosenblatt's ambitious target, it would translate into unimaginable gains of 22,769 percent relative to 2014's closing price.
Do you think NVIDIA is about to usher in generational wealth gain opportunities? Let us know your thoughts in the comments section below.
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