KeyBanc Capital Markets will$NVIDIA (NVDA.US)$The target share price is set at $1,200. Nvidia will announce quarterly results on May 22. The investment bank analyst said that the upward trend in current results and performance guidelines may be due to several factors. These include a better supply of H100 GPUs, China's strong demand for its H20 GPUs, and the initial supply of H200 GPUs.
Analysts said that amid strong expectations for its Blackwell family of GPUs, Nvidia's current products have not been greatly affected. Analysts also believe that in the long run, the Blackwell series of chips (scheduled to be launched in the second half of this year) may help data center revenue grow to more than $200 billion.
Analysts generally expect the upcoming revenue for the first fiscal quarter to be announced to be US$24.47 billion, with earnings per share of US$5.56. Analysts led by John Vinh wrote in an investor report: “Although the next generation of Blackwell GPUs is expected to be launched in the second half of the year, we believe there are limited signs of suspended demand, and Nvidia is expected to release significantly higher-than-expected first-quarter results and second-quarter guidance. We believe the return has favorable risk/reward, so we maintain (increase) our position.”
The analyst said, “The B100 (an alternative to the H100) and B200 are expected to increase starting in the third quarter and may account for most of GPU sales in the fourth quarter. (average price) is about 40% higher than Hopper. Coupled with the availability of the H200, we expect a smooth transition between Hopper and Blackwell, with both product lines growing over 25 years.”
Not only that, KeyBanc is optimistic about Nvidia's upcoming results, and another investment bank also expressed an optimistic view this week. On Tuesday, Wells Fargo raised Nvidia's price target, saying its data center business could grow significantly. The bank's analysts raised Nvidia's price target from $970 to $1,150. Looking ahead to the first quarter of fiscal year 2025 (results to be announced next week), analysts believe Nvidia's Q1 data center revenue will reach US$20.6 billion, an increase of 380% over the previous 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 Taiwan's export data has historically 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 that increased spending on hyperscale companies such as Meta (META.US), Microsoft (MSFT.US), Google (GOOGL.US), and Amazon (AMZN.US) cloud service AWS also bodes well.
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.
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