Nvidia (NASDAQ:NVDA) made headlines on Tuesday when investment firm Wells Fargo raised its price target for the semiconductor giant, citing the potential for upside in its data center sector.
stock 0.5% drop In pre-market trading.
“We think [intra-quarter] Request data points and reduce lead time on H100 GPUs (~10 Weekly) + H200 Early Ships, Cloud CapEx, Expanding Sovereign AI Efforts Show Another Direction [quarter] In a note to investors, the company's analysts led by Aaron Lakers raised their price target to $1,150 from $970.
We also increased our data center estimates for the next three fiscal years, now expecting data center size to be $93.2 billion, $126.4 billion, and $151.4 billion in 2025, 2026, and 2027, respectively.
Other notable data points include Super Micro Computers (SMCI), which is believed to derive about 70% of its first-quarter purchases from Nvidia. Analysts said Taiwan's export data has historically been “very highly correlated” with Nvidia data center revenue. Export data for the three months to April showed an increase of 360% year-on-year and 33% quarter-on-quarter.
Increased spending from hyperscalers such as Meta (META), Microsoft (MSFT), Google (GOOG) (GOOGL) and Amazon Web Services (AMZN) is also a good sign, analysts said.
Looking to the first quarter of fiscal 2025, they believe data center revenue will increase 380% year-over-year to $20.6 billion.
Analysts also expect NVIDIA to report “consistent/strong InfiniBand performance,” while AI Enterprise, which costs $4,500 per GPU per year, will drive software revenue to 2 billion annually through year-end. It pointed out that it is expected to reach $. .
Analyst consensus expects that the company will post earnings of $5.56 per share for the next quarter on revenue of $24.47 billion.