Nvidia’s AI Demand Story Compared to 1995 Internet Boom and iPhone Launch
Nvidia, the American technology company known for its graphics processing units (GPUs), is making waves in the tech industry with its AI demand story. Wedbush Securities analyst Dan Ives has compared this phenomenon to the internet boom of 1995 and the iconic launch of Apple’s iPhone in 2007, stating that it represents a drop the mic moment for the broader tech sector.
According to Ives, Nvidia’s guidance and commentary have reached unprecedented levels, and investors now recognize the undeniable reality of the AI demand story. This trend is on par with major technological advancements like the internet boom and the introduction of the iPhone. Ives likens Nvidia’s impact to that of renowned athletes such as LeBron James, Tiger Woods, Patrick Mahomes, and Caitlin Clark, referring to them as special, generational talents. The AI theme, he asserts, is similarly groundbreaking and transformative.
Ives emphasizes that investors should adopt a long-term perspective regarding Nvidia and other once-in-a-generation tech trends like AI. It is crucial to consider the growth potential, incremental margins, cash flow, and changes to the growth story over the next 3-5 years. Additionally, understanding the sum of the parts valuations will enable investors to fully grasp the extent of these remarkable growth stories.
Unsurprisingly, Nvidia’s outstanding results have had a positive ripple effect on several other semiconductor stocks. Companies such as AMD, Marvell Technology, Broadcom, and NXPI Semiconductors experienced notable gains following Nvidia’s success.
Looking ahead, Nvidia anticipates third-quarter sales of $16 billion, give or take 2%, surpassing analysts’ expectations of $12.5 billion. This optimistic projection has garnered praise from industry experts like KeyBanc Capital Markets analyst John Vinh. He commends Nvidia’s results and its well-above-expectations guidance. Vinh also highlights the increased supply expected for next year, including the Chip-on-Wafer-on-Substrate supply from Taiwan Semiconductor, which will offer increased visibility throughout the year.
Several analysts have raised their price targets for Nvidia as a result of its impressive performance. WestPark Capital analyst Kevin Garrigan upgraded his rating to buy from hold and elevated the price target to $690. He notes that Nvidia’s guidance has surpassed estimates, underpinned by the robust demand from the data center segment and the company’s Hopper and Ampere GPUs.
BMO Capital Markets analyst Ambrish Srivastava maintains his outperform rating on Nvidia and boosts the price target to $600 from $550. He highlights the continuous rise in AI demand, affirming its positive trajectory.
In conclusion, Nvidia’s AI demand story is taking the tech industry by storm, garnering comparisons to major technological advancements of the past. The company’s guidance and commentary have left investors astounded, recognizing the immense potential of AI. As this trend continues to grow, Nvidia is poised to lead the way, transforming various sectors with its innovative solutions. With positive results and increased projections, Nvidia’s momentum shows no signs of slowing down.
