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- Nvidia's blockbuster second-quarter earnings and third-quarter guidance blew away Wall Street's expectations.
- "This AI demand story is as REAL as any tech trend we have seen in the last 30 years only comparable to the Internet in 1995 and Apple's iPhone launch in 2007," Wedbush said.
- Here's how Wall Street is reacting to Nvidia's stunning earnings report.
Nvidia did it once again.
The company blew away Wall Street expectations for the second time in three months as it experiences unprecedented demand for its AI-enabling H100 GPU chips.
Nvidia reported second-quarter revenue of $13.5 billion, beating analyst estimates of $11.1 billion. Just a few months ago analysts expected about $7 billion. Adjusted earnings per share of $2.70 topped estimates of $2.09.
For the third quarter, Nvidia sees revenue of about $16 billion, well ahead of the consensus for $12.4 billion.
"A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI," said Jensen Huang, founder and CEO of Nvidia.
The company also announced a $25 billion stock buyback. Shares of Nvidia jumped 5% on Thursday to a new record high at about $502.
Here's how Wall Street reacted to Nvidia's blockbuster earnings report.
Wedbush
"Nvidia's guidance and commentary was at 'drop the mic' level as investors now recognize crystal clear this AI demand story is as REAL as any tech trend we have seen in the last 30 years only comparable to the Internet in 1995 and Apple's iPhone launch in 2007. Today it's Nvidia on the front line supplying the GPU/chips.....but ultimately the most important takeaway is this tidal wave of AI growth is now coming to software, chips, digital media, infrastructure over the coming years with $1 trillion of fresh spending in clear sights for the tech sector."
Wedbush reiterated its "Outperform" rating and raised its price target to $600 from $490.
JPMorgan
Nvidia "expects supply to increase Q/Q through next year which we believe can help the team drive solid revenue growth in datacenter in CY24. As a reflection of the wide supply/demand gap, the team noted that even with potential for additional China export controls for its compute products, the team does not believe there will be any near term financial impact. AI demand was broad-based across its customer set - cloud/hyperscale, consumer internet, and enterprise customers which reflects the strategic importance of investing in next-gen AI and accelerated compute initiatives."
JPMorgan reiterated its "Overweight" rating and raised its price target to $600 from $500.
Goldman Sachs
"We see the combination of a strong/broadening demand profile in Data Center and an improving supply backdrop supporting sustained revenue growth through CY2024. Importantly, although we recognize emerging competition from the large cloud service providers as well as other merchant semiconductor suppliers, we expect Nvidia to maintain its status as the accelerated computing industry standard for the foreseeable future given its competitive moat and the urgency with which customers are developing/deploying increasingly complex AI models."
Goldman Sachs reiterated its "Buy" rating and raised its price target to $605 from $495.
Stifel
"While we have long viewed NVDA as the primary beneficiary of the increasing investments being made on large language models/generative AI training clusters, we underestimated the opportunity related to the potential shift of $1 trillion of installed data center infrastructure from general purpose compute to accelerated compute architectures. As data center compute demand continues to expand, longer-term data center capacity growth is increasingly constrained by power limitations and the slowing of Moore's Law. The shift from x86 based CPU infrastructure to accelerated compute is underway, and NVDA's recent performance and outlook illustrates that the pivot is gathering speed."
Stifel upgraded Nvidia to "Buy" from "Hold" and raised its price target to $600 from $440.