Source: Zhitong Finance
On Tuesday, Wells Fargo raised Nvidia's price target, saying its data center business could grow.
On Tuesday, Wells Fargo raised$NVIDIA (NVDA.US)$The target price indicates that its data center business is likely to grow. The bank's analysts raised Nvidia's price target from $970 to $1,150. Nvidia will announce the latest results on the morning of May 23, Beijing time. Analysts believe Nvidia's Q1 data center revenue will reach $20.6 billion, up 380% year over year.
Analysts led by Aaron Rakers wrote in an investor report: “We believe that demand data points (within the quarter), the reduction in H100 GPU delivery times (around 10 weeks), combined with initial H200 shipments, cloud capital expenditure, and efforts to expand Sovereign AI all indicate that the data center is driving another (quarter) strong growth.”
Wells Fargo analysts also raised their data center spending forecasts for the next three fiscal years. Data center spending in 2025, 2026, and 2027 is expected to reach $93.2 billion, $126.4 billion, and $151.4 billion, respectively.
Analysts said that other notable relevant data include supercomputer (SMCI.US) performance. It is believed that about 70% of the company's purchases in the first quarter came from Nvidia; secondly, China's Taiwan export data has always been “highly correlated” with Nvidia's data center revenue; in the three months ending April, export data increased 360% year over year and 33% month over month.
Analysts said,$Meta Platforms (META.US)$,$Microsoft (MSFT.US)$,$Alphabet-A (GOOGL.US)$und$Amazon (AMZN.US)$Increased spending by hyperscale enterprises such as the cloud service AWS also bodes well. Looking ahead to the first quarter of fiscal year 2025 (results to be announced next week), they expect Nvidia's data center revenue to reach US$20.6 billion, an increase of 380% over the previous year. Analysts generally expect the company's second-fiscal quarter revenue of $24.47 billion and earnings per share of $5.56.
Analysts also pointed out that they expect Nvidia to announce “InfiniBand results that are in line with expectations/stronger than expected,” while software revenue is expected to reach $2 billion per year by the end of this fiscal year, thanks to artificial intelligence companies that cost $4,500 per GPU per year.
Editor/jayden