Anticipated by JPMorgan analyst Harlan Sur, a flourishing era awaits Nvidia Corp NVDA in 2024, driven by a remarkable surge in AI infrastructure investments.
Harlan Sur holds an Overweight rating on Nvidia stock, setting a price target of $850.
AI Paves the Way for 14% Growth in Cloud Datacenter Capex
Cloud datacenter capex is on the cusp of a significant upsurge, with a 14% growth trajectory attributed to the surge in AI infrastructure development and datacenter expansions. JPMorgan’s revised projections anticipate a substantial $15 billion swell in datacenter capex, with substantial investments earmarked for server technology and ancillary infrastructure such as networking and storage.
This expansion transcends top-tier cloud service providers (CSPs) to encompass Tier 2 CSPs, with Apple Inc AAPL leading the vanguard.
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AI Propels Nvidia’s GPU Business Forward
The profound focus on AI infrastructure is catalyzing the demand for Nvidia’s GPU solutions, nurturing a sustained trend of multi-quarter demand. Sur underlines the significance of AI demand as a pivotal driver for Nvidia’s datacenter GPU business, reaping benefits from escalated AI server expenditure.
Furthermore, Sur observes a shift in spending allocation towards GPUs and accelerators, propelled by the proliferation of AI and accelerated computing applications. Nvidia aims to seize a larger market share of the burgeoning datacenter infrastructure sector, leveraging its GPU-centric architecture tailored for diverse AI workloads.
Nvidia Harnesses Greater Software Monetization Opportunities
Complementing its hardware offerings, Nvidia is honing in on software monetization strategies within the AI domain, targeting enterprise clients with enhanced software monetization initiatives. This strategic approach complements Nvidia’s hardware portfolio and creates avenues for new market penetration.
Overall, JPMorgan forecasts substantial growth potential for Nvidia, propelled by stellar performances in segments such as PC gaming, data center, automotive, and enterprise. The sustained appetite for AI-centric technologies positions Nvidia for continued expansion and dominance in the market.
By leveraging its GPU-centric ethos and advancing software strategies, Nvidia is primed to capitalize on the evolving AI and accelerated computing landscape, fueling revenue growth and market ascendancy.
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Image generated using artificial intelligence in collaboration with Midjourney.
