Nvidia shares climb as analysts raise targets ahead of report
SHARES of Nvidia rose more than 3 per cent in hefty trading volume on Tuesday (Aug 15) after two brokerages raised their price targets for the chipmaker, heightening already lofty expectations ahead of its quarterly earnings report next week.
The world’s most valuable semiconductor company has been at the centre of a rally in technology stocks this year, fuelled by optimism about the potential of artificial intelligence (AI) and demand for components used to power the technology.
Over US$22 billion worth of Nvidia’s shares were traded as of mid-day, beating out US$14 billion of trades in Tesla, which is usually the Wall Street’s most traded stock.
“They’ve got to blow it away. That’s the bottom line. The bar is very high, and investors look like they’re pushing the bar higher, even into the report,” said Dennis Dick, a trader at Triple D Trading.
Nvidia shares rose as much as 3.5 per cent before trimming gains. They were last up 1.7 per cent at US$445, bringing gains this week to 9 per cent.
Nvidia was just one of three stocks in the Philadelphia semiconductor index trading higher on Tuesday after stronger-than-expected US retail sales data stoked worries that interest rates could stay higher for longer, rattling the stock market.
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“NVDA is quite literally serving as ‘kingmaker’ as a huge wave of capital and new financing vehicles are chasing new AI software and specialised cloud infrastructure models,” UBS analyst Timothy Arcuri wrote in a research report.
Ahead of Nvidia’s fiscal second quarter report on Aug 23, Arcuri lifted his price target to US$540 from US$475, while Wells Fargo increased its price target to US$500 from US$450. That came after Morgan Stanley on Monday named Nvidia its “top pick”.
“We think it’s hard to bet against NVDA’s pre-eminent positioning as the primary beneficiary of an AI-driven architectural data centre transformation,” Wells Fargo analyst Aaron Rakers wrote in his research note.
Nvidia’s stock surged 24 per cent on May 25 after the Santa Clara, California company gave a second-quarter revenue forecast more than 50 per cent above Wall Street estimates due to demand for its AI chips, which are used to power ChatGPT and similar services.
Analysts on average expect Nvidia to report a 66 per cent surge in quarterly revenue to US$11.13 billion, according to Refinitiv. That compares to Nvidia’s forecast for quarterly revenue of US$11 billion, plus or minus 2 per cent. REUTERS
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