Nvidia will enjoy the glory of the ChatGPT wave, the analyst said ahead of 4Q; Increase price target by more than 27%

news7f02/17/2023

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KeyBanc Analyst John Vinh maintains NVIDIA Corporation (NASDAQ: NVDA) with Overweight and gain price target from $220 to $280.
NVDA will report Q4 on February 22.
Street’s optimism reflects the commercialization of ChatGPT, with a greater focus on AI workloads from the cloud and enterprise, as well as new gaming (RTX40) and data center (Hopper) products. .
However, the analyst expects NVDA to downgrade the data center outlook as cloud Capex is slowing down to Meta Inc . Platform (NASDAQ: META), Amazon.Com Inc (NASDAQ: AMZN) AWSAnd Alphabet Inc (NASDAQ: GOOGLE) and China’s data center demand halted in connection with recently introduced export controls.
Vinh’s cloud tracking results also show that NVDA implementation will pause briefly when customers switch to Hopper.
However, the analyst has found the sustained growth of outsized data centers fueled by increased adoption of AI workloads in the industry, augmented by generalized AI workloads ( e.g. ChatGPT, Bard).
Vinh believes that the launch of the RTX40 is off to a good start as the demand for the 4090 is still very high, while the sales of the 4080 have remained stable.
However, the remaining surplus of RTX30 inventory and China’s difficulties with reopening will likely push back recovery expectations.
Price action: NVDA stock traded 3.60% lower at $212.10 as of Friday’s final check.