Nvidia To Bask In Glory Of ChatGPT Wave, Analyst Says Ahead Of 4Q; Boosts Price Target By Over 27%

• KeyBanc analyst John Vinh maintained NVIDIA Corp (NASDAQ: NVDA) with an Overweight and raised the price target from $220 to $280.

• NVDA will report its 4Q on February 22.

• The Street optimism reflected the commercialization of ChatGPT, a higher focus on AI workloads from the cloud and enterprises, and new gaming (RTX40) and data center (Hopper) product ramps.

• However, the analyst expects NVDA to lower its data center outlook given slowing cloud Capex at Meta Platforms Inc (NASDAQ: META), Amazon.Com Inc (NASDAQ: AMZN) AWS, and Alphabet Inc (NASDAQ: GOOGL) and a pause in China data center demand related to the recently introduced export controls.

• Vinh’s cloud tracker results also indicated a near-term pause in NVDA deployments as customers transition to Hopper.

• However, the analyst saw sustained outsized data center growth driven by increasing industry adoption of AI workloads, enhanced by generative AI workloads (i.e., ChatGPT, Bard).

• Vinh believes the launch of RTX40 is off to a good start as demand for the 4090 remains very strong, while the sell-through of the 4080 is solid.

• However, residual excess RTX30 inventory and China reopening headwinds will likely push out expectations for recovery.

• Price Action: NVDA shares traded lower by 3.60% at $212.10 on the last check Friday.

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