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Nvidia shares hit record highs as analysts hailed plans for an Arm-based data center CPU

Shares of Nvidia Corp. was trading at a record high on Tuesday as analysts raised its price target and welcomed the chipmaker’s plan to expand into rival territory.

+ 1.69%

The stock hit a new record high of the day of $ 625.40 on Tuesday, breaking the previous record of $ 614.90 set in February and taking the stock on the way for a new close high. Nvidia shared just missed setting a record high to close on Monday with a 5.6% gain to close at $ 608.36.

Monday’s gain came on the first day of the chipmaker’s week-long GTC developer conference, where the company said its first-quarter revenue was trending better than expected, and announced New data center CPU, code-named “Grace”, is meant to compete with Intel Corp.’s dominant server chips.

and Advanced Micro Devices Inc.
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Grace uses technology that has never really caught up in data center usage before from Arm Holdings PLC, which Nvidia Announced back in September it wants to buy from SoftBank Group Corp.
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for $ 40 billion. Since the deal was announced, many have noted that getting regulatory antitrust approval for a purchase would be difficult.

Do not miss: Nvidia intensifies competition with Intel and AMD with its first data center CPU

More than a dozen analysts raised their price targets for Nvidia shares on Tuesday morning as a result of product announcements and forecasts. Many said they were surprised to see the push to build a new Arm-based product because the deal was seeking regulatory rights, but they still liked the move.

Citi Research analyst Atif Malik, who has a buy rating and a $ 660 price target, said Grace’s announcement is positive “as it shows what Nvidia can offer with or without a deal. with Arm finished ”.

“That said, this is a complicated addition to the portfolio that, before awaiting a merger with Arm, could make regulatory antitrust approval more difficult,” Malik said. to speak.

Susquehanna Financial analyst Christopher Rolland, who has a positive rating and a $ 700 price target, said Nvidia’s “clear message” in the Grace chip announcement.

“Nvidia has a strong investment plan to accelerate ARM’s rise in data centers,” said Rolland. “The line between Intel, AMD and NVIDIA blurs even more as we expect a different DC landscape in 2025.”

Read: The worldwide shortage of chips is expected to last into next year and that’s good news for semiconductor stocks

Cowen analyst Matthew Ramsay, who has a better rating and a $ 675 price target, said “with or without M&A,” Nvidia’s Grace announcement was a surprise.

“We firmly believe it is only a matter of time before Nvidia releases its own Arm-based CPU product; However, we don’t expect it to be made public while the Arm deal is under regulatory review, ”Ramsay said. “At a time when industry regulators and players were scrutinizing the controversial deal, we were surprised by the announcement even though our tests showed development was already underway. has been done since before the Arm deal was announced. ”

Evercore ISI analyst CJ Muse, who has a better rating and a $ 675 price target, says he sees earnings of $ 14 or more per share by 2021 based on public reports. Company that demand is expected to exceed supply this year, even as supply is improving. Analysts surveyed by FactSet project average earnings of $ 13.34 a share by 2021.

“Overall, we see Nvidia as well positioned as the initiator of the vertical industry revolution as we move towards the next wave of AI,” Muse said.

Jefferies analyst Mark Lipacis, who has a buy rating and price target of $ 680, says other announcements, like Nvidia’s partnership with Amazon.com Inc.
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Amazon Web Services, new software products for business customers, and new AI models support his “thesis on the power of 2025 EPS of $ 50.” In 2020, Nvidia reported earnings of $ 10 a share.

Of Nvidia’s 38 analysts, 31 have a buy-in rating, five have a rating, and two have a sell rating, according to FactSet. Among them, 14 increased their price target, resulting in an average price target of $ 654.47, up from the previous $ 642.85 level, according to FactSet data.



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