Oppenheimer expects Nvidia to forecast 9% growth in data-center revenue for its first fiscal quarter from the prior year.
Courtesy of NVIDIA
Nvidia
should be insulated from any slowdown in the broader economy by increased spending on artificial intelligence, say analysts at Oppenheimer, who lifted their price target for the semiconductor company.
The heightened interest around artificial-intelligence should set investors’ minds at ease ahead of
Nvidia
‘s earnings next week, say the analysts, with the semiconductor maker’s commentary on data-center spending in focus.
AI spending is “likely sacrosanct” even as the broader economy slows, say the
Oppenheimer
analysts, led by Rick Schafer. They reiterate an Outperform rating on
Nvidia
(ticker: NVDA) stock raising their target price to $250 from $225.00.
Oppenheimer expects Nvidia to forecast 9% growth in data-center revenue for its first fiscal quarter from the prior year. The analysts warn there is a chance the outlook will disappoint due to reduced spending from the largest technology companies but argue this is set to only be transitory ahead of a wave of AI spending.
Both
Alphabet
(GOOGL) and
Microsoft
(MSFT) have unveiled AI-powered conversational chatbot companions for their Google and Bing search engines recently.
Other analysts are also backing Nvidia to benefit from the rush into AI. Analysts at BofA Global Research recently raised their target price on the stock, citing AI as a driver of growth.
Headwinds are set to be more noticeable in Nvidia’s gaming segment, where Oppenheimer forecasts a 54% fall in first-quarter revenue from the prior year, as spending slows from the boom during the pandemic. The analysts expect gaming demand to normalize at $10 billion a year.
Nvidia stock was down 1.3% in premarket trading on Friday at $217.10, having risen more than 50% this year so far. The stock remains well below the peak of more than $330 it reached in late 2021.
Write to Adam Clark at adam.clark@barrons.com
Credit: marketwatch.com