How Investors Can Seize Opportunities in NVDA Amid Market Volatility

According to Todd Gordon, founder of Inside Edge Capital: NVIDIA Corporation (NVDA) Is Strong buy despite recent decline. The chart analyst also set a price target for the stock at $1,150.

“NVDA is just taking a break and preparing for another move, but this time they’re bringing in more friends. There are quite a few other names in a similar semi-industrial setup, which tells us the chips are ready to be ripped apart once again,” Gordon said.

Additionally, Bank of America maintained a Buy rating on NVDA on March 13. The target stock price was raised from $925 to $1,100.. Nvidia is expected to dominate the $90 billion accelerator market in 2024, unaffected by Google’s new CPU launches, according to BofA analyst Vivek Arya.

Last month, CNBC’s Jim Cramer suggested that investors welcome an impending downturn. “I think people are right to expect a downturn here,” Cramer said. said. “But that’s not a reason to head for the hills. Instead, you might want to save up some cash, watch the market expand, and then buy your favorite tech stocks when they fall.”

In particular, Cramer said there could be an attractive opportunity to invest in NVDA, one of his favorite stocks. He has hinted at his continued support for the tech giant over the years, even though the stock has suffered significant losses. While some on Wall Street are growing weary of AI, Cramer emphasized that the future “runs at Nvidia.”

“If you don’t own Nvidia yet, guess what? You will get the sale soon,” he said. “And if you already own one, keep using it, because it’s so difficult to replace it and get it back at the right level.”

NVDA’s stock price has surged more than 75% year to date and nearly 223% over the past year. However, the stock has fallen about 3% over the past month.

Let us now discuss in detail the factors that may affect NVDA’s performance in the short term.

Better Q4 revenue and profits

The chip giant reported fourth-quarter 2024 results that surpassed analysts’ expectations. NVDA for the quarter ended January 28, 2024 Non-GAAP revenue was $22.1 billion.This figure surpassed analysts’ estimates of $20.55 billion. This compares to $6.05 billion in revenue in the same quarter in 2022.

The company reported record revenue from its data center segment of $18.4 billion, up 409% year-over-year. NVIDIA has made significant progress in this area of ​​its business. Partnering with Google to launch NVDA Optimizing Data Center and PC AI Platforms for GemmaGoogle’s groundbreaking open language model.

Additionally, the company expanded its business. Partnership with Amazon Web Services (AWS) To host NVIDIA® DGX™ Cloud on AWS.

When it comes to technological innovation, NVIDIA has introduced several groundbreaking solutions: NVIDIA NeMo™ Retriever. A generative AI microservice that enables enterprises to connect custom, large-scale language models with enterprise data to provide highly accurate responses for a variety of AI applications.

Additionally, NVIDIA released NVIDIA MONAI™ Cloud APIFacilitating the seamless integration of AI into medical imaging products for developers and platform providers.

The company’s gaming revenue for the quarter was $2.9 billion, up 56% year-over-year. Talking about the recent developments in the gaming segment, NVIDIA said: GeForce RTX™ 40 SUPER Series GPUIt starts at $599 and features advanced RTX™ technologies like DLSS 3.5 Ray Reconstruction and NVIDIA Reflex for an enhanced gaming experience.

I also introduced it at the company. Microservices for NVIDIA Avatar Cloud EngineGame and application developers can integrate cutting-edge generative AI models into non-playable characters to increase the immersion and interactivity of virtual worlds.

NVIDIA’s non-GAAP operating income increased 563.2% year-over-year to $14.75 billion. Additionally, the company’s non-GAAP net income increased 490.6% year over year to $12.84 billion. Non-GAAP earnings per share were reported at $5.16, up 486% year-over-year compared to the consensus estimate of $4.63.

Additionally, the company’s non-GAAP free cash flow increased 546.1% year-over-year to $11.22 billion. Total current assets were $44.35 billion as of January 28, 2024, compared to $23.07 billion as of January 29, 2023.

On a call with analysts, Nvidia CEO Jensen Huang addressed investors’ concerns about the company’s ability to maintain its current levels of growth or sales throughout the year.

“Basically, the conditions for continued growth beyond 2025 are very good,” Huang told analysts. He added that the adoption of generative AI and the industry-wide shift from central processors to Nvidia’s accelerators will continue to drive continued demand for the company’s GPUs.

NVIDIA expects revenue of $24 billion in the first quarter of fiscal 2025. The company’s non-GAAP gross margin is expected to be 77%.

Nvidia announces latest AI chips at GTC AI conference

NVDA announced its next-generation AI chips and software geared toward running AI models at its developer conference held March 18 at the SAP Center in San Jose, California. The announcement highlights the chipmaker’s efforts to solidify its position as a supplier for AI companies.

The next-generation AI graphics processor is named blackwell. The first Blackwell chip is the GB200 and is expected to be released later this year. It is also available as a full server called the GB200 NVLink 2, which combines 72 Blackwell GPUs and other Nvidia parts designed for training AI models. NVIDIA is luring customers by offering more powerful chips to spur new orders.

The announcement comes as companies and software manufacturers are still scrambling to get their hands on the current “Hopper” H100 and similar chips.

“Hopper is fantastic, but it requires bigger GPUs,” Nvidia CEO Jensen Huang said at the company’s developer conference.

The tech giant also rolled out monetization software called NIM, short for Nvidia Inference Microservices, on its Nvidia enterprise software subscription. NIM simplifies the use of older Nvidia GPUs for running inference or AI software and allows enterprises to leverage the hundreds of millions of Nvidia GPUs they already have.

According to Nvidia executives, the company is transitioning from being primarily a mercenary chip provider to a platform provider with: Microsoft Corporation (MSFT) or Apple Inc. (AAPL)Other companies can build the software.

Goldman Sachs analysts maintained a Buy rating on NVDA stock and raised their price target from $875 to $1,000. them He expressed a “newfound appreciation” for Nvidia’s innovation.Customer and partner relationships, after the company’s keynote, play a key role in the creation AI space.

“Based on recent industry conversations, we expect Blackwell to be the fastest-growing product in Nvidia’s history,” the analysts said. “Nvidia has played and will continue to play a critical role in democratizing AI across a variety of industries.”

conclusion

NVDA topped Wall Street estimates for earnings and revenue for the fourth quarter of fiscal 2023. Chipmakers have benefited greatly from the tech industry’s recent obsession with large AI models developed on top of expensive server graphics processors.

Additionally, reported sales from the company’s data center business account for the majority of its revenue. NVDA’s data center platform is driven by a variety of drivers, including demand for data processing, training, and inference from large cloud service providers, GPU specialty providers, enterprise software, and consumer Internet companies.

Additionally, vertical industries centered on automotive, financial services, and healthcare are now billions of dollars in size.

The data center GPU market is expected to be worth more than $63 billion by 2028. Growing at an incredible CAGR of 34.6% During the forecast period (2024-2028). The growing adoption of data center GPUs in the enterprise bodes well for NVDA.

Analysts expect NVDA’s revenue and EPS for the first quarter of fiscal 2025 (ending April 2024) to hit $24.29 billion and $5.51 billion, up 237.7% and 405.9%, respectively, from the same period last year. Moreover, the company has topped consensus revenue and EPS estimates in all four subsequent quarters, which is noteworthy.

Additionally, for the fiscal year ending January 2025, the company’s revenue and EPS are expected to reach $111.49 billion and $24.89 billion, up 83% and 92.1%, respectively, from the previous year.

NVDA has made significant progress across its businesses, and this year will introduce a new product cycle with significant innovation to help drive the industry forward.

Since the AI ​​boom began with OpenAI’s ChatGPT in late 2022, Nvidia’s stock price has risen fivefold, and total revenue has more than tripled. The company’s advanced server GPUs are essential for training and deploying large-scale AI models. Especially technology companies like MSFT. Metaplatforms (META) Billions of dollars were spent purchasing these chips.

The chipmaker recently announced its next-generation AI chips and software for running AI models, giving customers another reason to stick with Nvidia chips. A growing competitive fieldinclude AMD (Advanced Micro Device) and Intel Corporation (INTC).

NVDA’s stock price has fallen nearly 3% over the past month, but several analysts have confirmed their bullish sentiment about the stock due to NVDA’s booming AI business and new innovative launches to maintain its leadership position amid increasing competition. and confirmed significant upside potential. .

Considering these factors, investors may want to consider buying NVDA for its potential gains.