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HomeMarketNvidia Stock Is Cowen's Best Chip Idea for 2023

Nvidia Stock Is Cowen’s Best Chip Idea for 2023

Cryptocurrency mining equipment equipped with Nvidia graphics processing units, shown at a trade fair in Bangkok in May.

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Andre Malerba/Bloomberg

Nvidia’s leadership in semiconductors for artificial intelligence applications will boost the chip maker’s revenue and spark a comeback for the shares,
Cowen
believes.

On Monday, analyst Matthew Ramsay reiterated his Outperform rating for
Nvidia
stock (ticker:
NVDA
) and raised his forecast for the price to $220 from $200.

“NVIDIA is the leader in accelerated compute and the key enabler for AI across vertical industries – full stop,” he wrote. “With several strong product cycles anticipated in 2023, we plant the flag and say ‘when’ is ‘now’ to own NVIDIA as our Best Idea in 2023.”

Nvidia shares were up by 0.5% at $170.89 late on Monday morning. The
S&P 500
was 0.5% higher as well.

Ramsay is optimistic over the company’s latest data-center product and the Grace processor, which is expected to be released next year. He also expects Nvidia’s gaming business to return to growth by 2024.

“In our view, investors under-appreciate how early we are in AI penetration, and the ability for NVIDIA to create new markets/use cases through product innovation (both hardware and software),” he wrote.

The analyst forecasts Nvidia will generate $30.9 billion in revenue for fiscal 2024 and $38.6 billion for fiscal 2025. Those figures are 5% and 7% above Wall Street consensus estimates, respectively.

Nvidia has had a difficult year. The stock has declined by about 42% this year after a series of disappointing quarters, compared with a 31% drop in the
iShares Semiconductor ETF
(SOXX), which tracks the performance of the ICE Semiconductor Index.

Write to Tae Kim at tae.kim@barrons.com

Credit: marketwatch.com

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