Nvidia may report its first-quarter results soon, with investors eagerly looking at the returns from the company’s investment in artificial intelligence and metaverse products. The chipmaker’s semiconductor sales are also linked to ether mining, which is expected to compensate for the loss of revenue from the sale of graphics processing units (GPUs). Despite this, Nvidia is considered one of the best-positioned companies in the semiconductor sector this year, with a dominant position in generative AI and new product cycles in the data center and gaming sectors.
KeyBanc Capital Markets believes that competitive risks for Nvidia are limited, and it will continue to dominate one of the fastest-growing workloads in cloud and enterprise. As a result, KeyBanc has reiterated its overweight (outperform) rating on the stock and raised its price target to $375 from $320. Wedbush Securities analyst Matt Bryson, on the other hand, has a neutral rating on the stock but expects AI demand to rise for at least the next year.
Nvidia is betting big on the burgeoning market of Metaverse-enabled software and artificial intelligence leveraging graphics-oriented semiconductors. The AI boom sparked by OpenAI’s chatbot ChatGPT has led to a surge in demand for GPUs, with Chinese giants such as Baidu buying up Nvidia’s AI GPUs.
In March, Nvidia announced a partnership with Microsoft focused on bringing the industrial metaverse and AI to enterprises via its cloud computing platform Azure. Nvidia CEO Jensen Huang reiterated that his goal is to bring his new AI, simulation, and collaboration capabilities to every industry.
Wall Street analysts expect Nvidia’s Q1 revenue to fall 22% to $6.5 billion from $8.3 billion in the same period last year, with EPS to fall 17% to 92 cents from $1.11.