Nvidia
smashed expectations with its third-quarter earnings and guidance, and analysts said the leading semiconductor maker for artificial intelligence still has room to grow.
That wasn’t enough to stop
Nvidia
(ticker: NVDA) shares from slipping just after it reported, but shares were rising again early Wednesday.
Nvidia,
having gained more than 240% this year, was up 0.5% to $502 in premarket trading.
Industry analysts praised the results even if stock traders were more wary to pile in to the AI hype following the huge recent gains for
Nvidia.
Another concern is that restrictions on chip exports to China, one of Nvidia’s biggest markets, will get worse before they get better. The U.S. government is trying to prevent the highest-spec units from getting to China if they might be used for military purposes.
“With much optimism built into the stock, almost nothing would have stopped a profit-taking pullback,” said Benchmark analysts, led by Cody Acree, who give the shares a Buy rating with a $625 price target. “But Nvidia is well.”
Rival semiconductor maker
Intel
(INTC) was up 0.2% Wednesday.
Arm
(ARM) was up 0.7%, and
Advanced Micro Devices
(AMD) rose 1%. Futures for the tech-heavy Nasdaq-100 index were up 0.2%.
After Nvidia’s Tuesday earnings report, analysts at KeyBanc led by John Vinh kept their Overweight rating on
Nvidia,
with a price target of $650. “We’re encouraged by these strong results and view Nvidia as best positioned to monetize Gen AI,” they wrote in a research note.
Piper Sandler
strategists also maintained their Overweight rating on the stock. Their price target is $620. “Results and guidance for the October and January quarters were well above Street expectations,” said Harsh V. Kumar and Robert Aguanno in a note. “Importantly, management called out implications from lost sales due to China restrictions are expected to be minimal.”
Itau BBA raised its price target after the earnings to $640 from $600. Nvidia “is a must-have stock from global portfolios, particularly those focused on tech,” said analysts led by Thiago Alves Kapulskis.
“Even without any revenue from the second largest country in the world (in terms of both GDP and AI demand), Nvidia was still able to issue very strong guidance. This is strong evidence that demand is resilient,” the Itau analysts said.
Others were also bullish about Nvidia’s prospects. CFRA Research’s Angelo Zino kept his buy rating with a $600 target.
“It’s important to remember that chip restrictions will affect Nvidia as well as every other player in the space,” said GraniteShares CEO Will Rhind. “This is a company that we would be very cautious about betting against.”
Write to Brian Swint at brian.swint@barrons.com
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