Evercore ISI Raises Nvidia's Price Target, Citing AI-Driven Market Strength

Evercore ISI boosts NVIDIA shares target on strong AI-driven market position By Investing.com

On Friday, Evercore ISI increased its price target on NVIDIA (NASDAQ:NVDA) shares, a leading technology company known for its advanced graphics processing units (GPUs). The new price target is set at $150.00, up from the previous $145.00, while the firm maintains an Outperform rating on the stock. The adjustment reflects Evercore ISI's positive outlook on NVIDIA, which they regard as their top pick in the Tectonic Shift in Computing space. NVIDIA's comprehensive ecosystem is seen as a key advantage, potentially enabling the company to capture a significant market share, estimated between 70-80%, during the era of parallel processing. Evercore ISI's confidence in NVIDIA extends to long-term financial projections, anticipating the company to achieve more than $10 in earnings per share (EPS) by 2030. The firm also speculates that NVIDIA could grow to represent a substantial portion of the S&P 500 Index, ranging from 10-15%. The firm has revised its short-term expectations upwards, raising its third-quarter and full-year 2024 estimates. This revision is based on NVIDIA's strong positioning and the anticipated value creation in its market segment. The report also acknowledges potential risks, noting that capital expenditure forecasts for hyperscale computing are variable and subject to change. The forecasts rely on Evercore ISI's Internet and Software Equity Research Teams, and the firm concedes that these projections could be subject to significant alterations with minimal notice. In other recent news, investors have been closely monitoring Nvidia (NASDAQ:NVDA)'s performance due to its impact on the artificial intelligence sector. The company's earnings report, due to be released on August 28, is expected to be a bellwether for the industry. Analysts from KeyBanc Capital Markets maintained an Overweight rating on Nvidia, despite a reported delay in the release of the Blackwell chip, suggesting that the delay will not affect the near-term financial results or guidance for the company. Simultaneously, Rosenblatt Securities reiterated a Buy rating on Nvidia, expecting the company to surpass expectations for its July quarter earnings and provide an optimistic outlook for the October quarter. Citi maintained a Buy rating on Nvidia, projecting July-Quarter total and data center sales to align with expectations. HSBC (LON:HSBA) raised its price target on Nvidia and maintained a Buy rating, citing strong AI demand. In addition to earnings and revenue results, Nvidia has been a focal point due to other developments. Advanced Micro Devices (NASDAQ:AMD) announced plans to acquire server manufacturer ZT Systems for $4.9 billion, a move expected to enhance its artificial intelligence chip and hardware offerings, enabling it to compete more effectively with Nvidia. These recent developments provide valuable insights for investors interested in Nvidia. As the company continues to navigate the dynamic landscape of the technology sector, it remains a major focus for analysts and investors alike. Evercore ISI's positive stance on NVIDIA is echoed by the company's robust financial metrics and market performance. With a soaring revenue growth of 208.27% over the last twelve months as of Q1 2023, NVIDIA's financial health appears strong. The company's gross profit margin stands at an impressive 75.29%, indicating efficient management and a strong market position. These figures are complemented by NVIDIA's high return on assets, which has reached 70.1%, showcasing the company's effectiveness in utilizing its assets to generate profits. Investors considering NVIDIA's stock will find additional confidence in the InvestingPro Tips, which highlight that the company has a perfect Piotroski Score of 9, reflecting high financial health, and that analysts anticipate sales growth in the current year. These insights suggest that NVIDIA is not only performing well currently but is also expected to continue its growth trajectory. For those interested in further analysis and additional InvestingPro Tips, there are 19 more listed on InvestingPro's platform, providing a comprehensive outlook on NVIDIA's financial prospects. With a market capitalization of $3040.0 billion and a forward-looking P/E ratio of 71.94, NVIDIA is trading at a premium, which may be justified by its strong market position and growth prospects. The company's stock has experienced a significant uptick, with a 57.02% return over the last six months, indicating robust investor confidence. These data points and insights from InvestingPro can help investors make informed decisions about NVIDIA's potential as an investment.

Blackwell concerns 'overdone', buy Nvidia stock into earnings: Evercore By Investing.com

Evercore ISI analysts advised investors to buy Nvidia (NASDAQ:NVDA) stock ahead of the chipmaker's earnings report for the July quarter, stressing that recent concerns over Blackwell delays are "overdone." The investment bank notes that demand for Nvidia systems remains strong, citing a 20% quarter-on-quarter surge in hyperscale capital expenditure (CapEx) in Q2 2024. Looking ahead, CapEx is expected to grow a further 8% and 10% in Q3 and Q4, respectively. Earlier this month, reports suggested that Nvidia's much-anticipated Blackwell system, which includes its next-generation AI chips, could face a delay of up to three months. The news raised investors' concerns about the sustainability of NVIDIA's stock's upward trajectory and was a contributing factor to the recent sell-off. After analyzing three previous instances of Nvidia product disruptions in 2008, 2022, and 2023, Evercore analysts conclude that while a negative announcement could lead to a short-term 5%-to-10% drop in the stock, NVDA has consistently demonstrated its ability to swiftly develop alternative solutions. "Furthermore, should a delay manifest, we believe demand is so strong, particularly at Tier 2 and 3 CSPs (Cloud Service Providers) and enterprises, that current generation Hopper solutions would be purchased even if Blackwell was pushed," analysts noted. Moreover, they observe that Nvidia shares have experienced two significant corrections, each over 50%, in recent history: one in the second half of 2018, occurring one quarter before peak capital expenditure (CapEx) when the stock was trading at a price-to-earnings (P/E) ratio of 38, and another in 2021-22, four quarters before peak CapEx, starting with a P/E of 67. With peak CapEx forecasted for the fourth quarter of 2025 and NVIDIA's current P/E at 39, the analysts do not anticipate a significant sell-off in the stock before mid-2025. Overall, Evercore's team continues to view NVDA as its "Top Tectonic Shift in Computing pick," positioned to capture up to 80% of the value created in the parallel processing era. Analysts believe the AI darling could accumulate more than $10 of earnings per share (EPS) power by 2030 "and that it could ultimately grow to be 10-15% weighting of the S&P 500 Index." Near-term, Evercore raises its third-quarter and 2024 estimates for Nvidia and lift its target price on the stock from $145 to $150.