NVIDIA (NVDA) PT Raised to $500 at Evercore ISI, 'Jensen Dropping Mics and Jaws'
Evercore ISI analyst C.J. Muse raised the price target on NVIDIA (NASDAQ: NVDA) to $500.00 (from $320.00) while maintaining a Outperform rating.
The analyst comments "What can we say other than just WOW! NVDA guided July revenues of $11.0B, ~53% better than consensus or in dollar terms $3.8 Billion better - we’ve simply never seen a beat like this…ever. The underlying driver here is Data Center which is expected to essentially double from $4B in April to $8B in July. The obvious drivers here are accelerated computing and generative AI, but the magnitude of the beat amidst supply constraints is just amazing. We would note that some bulls were thinking $10+ in EPS into the CY25 timeframe – well, NVDA will be earning $8+ on an annualized basis in July 2023. So the takeaway – the 2025 bullish view was likely very conservative. So where do we go from here? Near-term, management highlighted 2HCY23 Data Center tracking significantly higher than 1HCY23 (we are now modeling +55% H/H which will likely prove conservative). It sure feels like nearly every cloud dollar is going to NVDA this year. We also note multiple products ramping today including H100, Grace, Grace-Hopper, Bluefield 3, and Spectrum 4. Also, look for Jensen to announce a new ethernet based generative AI connectivity solution at Computex on Sunday night. Medium-term, NVDA discussed $250B spend on Data Center infrastructure annually with accelerated compute only ~6-8% penetrated today. With Generative AI driving a clear need for accelerated computing, there is clearly a very long runway here. Our estimates move significantly higher – CY23 revs/EPS to $44.2B/$8.00 (consensus $30.3B/$4.62) and CY24 to $58.9B/$11.50 (consensus $38.6B/$6.31). And with a clear path to sustained growth into 2025 and beyond as we are still in the top half of the first inning in Generative AI/Accelerated Computing, we see a long path of growth ahead. We maintain our Outperform rating, NVDA remains a TOP PICK, and we raise our price target to $500 (reflecting 28x 2025/2026 earnings power approaching $18). Relative to after-market of $380, this represents upside of at least another 30+%."