NVIDIA (NVDA) PT Raised to $650 at BofA Securities, 'Transformative AI pipeline, still in early stages'
BofA Securities analyst Vivek Arya raised the price target on NVIDIA (NASDAQ: NVDA) to $650.00 (from $550.00) while maintaining a Buy rating.
The analyst comments "We reiterate our Buy rating on top sector pick NVIDIA, raising our FY24/25E (~CY23/24E) pf-EPS by a material 35%/40% to $10.64/$15.46, with our longer-term model (CY27E) presenting scenarios towards $30/sh EPS power vs $22/sh prior. While genAI adoption is still in the show-me stages, demand signals point to a wholesale embracing of NVDA’s accelerated computing approach by major cloud/enterprise customers for transforming ~$1Tn in data center infrastructure, much like the move to x86-based minicomputers from IBM mainframes many decades ago. We believe we are still in the early stages of this transformation, with ~10-12% of servers accelerated heading towards 30-50% attach-rates over the next few years. In our view, NVDA’s full-stack approach of silicon, software, systems, scale, supply and partners makes it very difficult for competitors to catch up (some rivals such as INTC, AMD at risk of seeing major cannibalization of their x86 CPU-driven traditional computing sales). We raise our PO to $650 from $550 on 42x CY24E PE (vs. 50x prior), on recent reduction in sector multiples, though still within our 1-2x PEG ratio framework. A key risk is the threat of China restrictions."