Does the Latest Nvidia Analyst Forecast Influence Your Investment Strategy?

A Positive Outlook From Susquehanna Analyst Christopher Rolland

Yesterday, Susquehanna analyst Christopher Rolland reiterated a Positive rating on Nvidia Corp (NVDA) with a price target of $850, up from $625. Rolland’s forecast comes ahead of Nvidia’s fourth-quarter earnings report on February 21.

Insights into Data Center Revenue and Demand

Rolland’s optimism stems from strong signals around Data Center GPUs, with Al demand remaining robust, suggesting continued vital GPU purchases. According to Rolland, the worry about an air pocket ahead of B100 is increasingly less likely.

Supply and Demand Dynamics

Rolland also noted that supply is somewhat of a gating issue, but less so, as evidenced by the sequential rise in purchase obligations in the last quarter.

Shift in Revenue Drivers and Future Expectations

Rolland expects a mix shift away from A100s, estimating a potential revenue and growth driver as Nvidia has aggressively shifted towards H100. He also anticipates benefits in the second and fourth quarters as the H200 and B100 ramps.

Projections for Gaming, Pro Viz, and Auto Businesses

Rolland forecasts Gaming to be in line to slightly better and projects consistent high demand for Omniverse AI workstation offerings in the Pro Viz segment. However, he remains cautious about the gloomy outlook in the Auto segment due to weaker Chinese EV demand and a slowdown in global EV demand.

Rolland’s Forecast and Market Response

Rolland expects another strong financial report, but he believes that investors have already factored in this near-term upside. His expectations for the fourth quarter, first quarter, and fiscal 2025 revenue may be closer to the whisper number. Despite these expectations, he views Nvidia as having one of the most significant opportunities ahead and at a reasonable multiple.

Price Actions and Investors’ Reaction

Following the upgraded forecasts, NVDA shares traded higher by 1.48% at $731.98 on Wednesday.