Nvidia shares end at record high as earnings and outlook

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Nvidia shares end at record high as earnings and outlook

Nvidia Corp. shares ended at a record high Thursday, after a 10% jump out of the gate, Wall Street analysts could find little to complain about in the chip maker's earnings report and outlook as it turned in another record quarter.

Nvidia NVDA's shares rallied as much as 12% to an intraday high of $327.60, and closed up 8.3% at $316.75, a new closing record. Shares last closed at a split-adjusted all-time high of $308.04 on November 8.

Nvidia turned in a quarter of record sales, beating Wall Street estimates and forecasting an outlook that exceeded expectations, as it turned in another quarter of record sales. Last week s GPU Technology Conference, or GTC, Nvidia unveiled several new tools, such as Omniverse expansions, to help developers build the so-called metaverse, which several analysts mentioned in their reports.

Of the 43 analysts who cover Nvidia, 35 have buy ratings, six have hold ratings and two have sell ratings. The average price target was $325.31, up from a previous $280.70, according to FactSet data.

The analyst Christopher Rolland, who has a positive rating and recently raised his price target to $360 from $250, said that clockwork turned in another raise and beat, and called out Nvidia Chief Executive Jensen Huang's comments on the underpenetration of the data center.

Interestingly, Jensen believes that less than 10% of servers are accelerated by GPUs today, but that attach will grow to 100%, Rolland said.

Evercore ISI analyst C.J. Muse, who has an outperform rating and $350 price target, said that Huang is just getting warmed up, and that there is a long runway of growth ahead of Nvidia. The company says that the segment should continue to grow into FY 23 due to the very lean channel inventory. For Gaming, seasonality is out the window, with the company saying that this segment should continue to grow into FY 23.

In CY 22 Data Center is expected to shine again with cloud service providers scaling out deep learning and AI workloads aggressively along with continued penetration of Ampere at vertical customers and budding software opportunities, as well as excellent visibility and a good year for the segment, according to Muse.

Bernstein analyst Stacy Rasgon, who has an outperform rating and $360 price target, said it was hard to imagine things going smoother for Nvidia, but kept a close eye on the stock's already high price.

Despite the fact that shares are trading at eye-watering levels and likely requiring investors to begin underwriting some new software metaverse-y opportunities, Rasgon said that valuation without a catalyst is a poor reason to make a move, and while we admit to white-knuckling it a bit here, we see a narrative that is stronger rather than weaker. Jefferies analyst Mark Lipacis, who has a buy rating and raised his price target to $370 from $260, said he estimates a total addressable market of $80 billion from Omniverse licenses.

Lipacis said that virtual reality will find its way into numerous other applications that are not yet fully comprehended by the market.

Over the past 12 months, Nvidia shares have rallied 136%, while the PHLX Semiconductor Index SOX increased 54%, the S&P 500 index SPX rose 32%, and the tech-heavy Nasdaq Composite Index COMP gained 36%.