Nvidia (NVDA) stock rose nearly 5% on Tuesday on bullish calls from Wall Street analysts who cited strong chip demand ahead of an earnings report scheduled for Wednesday afternoon.
In a client note this week, Stifel analyst Reuben Roy raised his price target on Nvidia to $180 from $165, and William Stein of Trust Securities raised his stock price outlook to $167 from $148.
Roy cited “various data points,” including continued high spending on AI infrastructure by hyperscalers and demand for Nvidia’s latest Blackwell AI chips.
“We believe NVDA is well-positioned in the market to produce comprehensive TAM. [total addressable market, or revenue opportunity] It could exceed $100 billion by 2025, and the long-term opportunity funnel could approach $1 trillion,” Roy wrote.
Nvidia stock also rose on news that one of its customers, cloud provider Nebius Group (NBIS), will launch its first GPU cluster in the United States. Uses up to 35,000 Nvidia chips. A GPU cluster is a network of graphics processing units (AI chips) with vast computational power used to train and run artificial intelligence software.
For reference, Nebius’ order for 35,000 Nvidia chips represents about 4% of the amount of Hopper AI chips that Wall Street analysts expect Nvidia to ship in the October quarter, according to Bloomberg consensus data. equivalent.
Nvidia declined to comment on the deal.
The rise in Nvidia stock came a day after the stock fell following an information report about overheating issues with Blackwell AI servers. Reportedly in August, Nvidia Address design flaws This relates to Blackwell’s individual chips themselves, causing the company to postpone ramping up chip production to the January quarter.
Nvidia has not confirmed any overheating issues with Blackwell servers, and the company told Yahoo Finance on Monday that “engineering iterations are normal and expected.”
“While our conversations with industry participants do not exactly corroborate this latest data point, it does reflect the supply chain challenges associated with increased production,” Trust Securities’ Stein said of the overheating issues reported this week. “
Despite the Blackwell issue being reported, Dell Technologies (DELL) said it is already shipping its latest AI hardware product, the PowerEdge system, along with Nvidia’s latest GB200 NVL72 system.
“[C]”We feel the comments from NVDA, our partners, and industry stakeholders have been very positive,” Stein wrote in a note to investors. He noted that there is new demand for NVIDIA chips not only among AI software developers, but also in robotics and “traditional” computing fields.
