CFRA Research raised NVIDIA’s (NASDAQ:NVDA) price target to $700 from $600 on Tuesday, maintaining a Buy rating. Analysts affirmed their FY24 (January) EPS estimate at $12.29 but boosted FY25 to $20.58 from $17.85 and FY26 to $23.76 from $21.18. The higher estimates primarily stem from optimistic data center growth, fueled by new product launches (H200 in H1 and Blackwell in H2), elevated price points, and a strategic approach to pacing GPU launches.
The analysts anticipate 15%-20% upside to the quarterly revenue run rate by the end of CY 24, driven by momentum in both CPU and networking segments. They emphasize NVIDIA’s approval to ship performance-tempered GPUs (H20, L20, L2) into China, mitigating downside risks in the region for the time being.
Additionally, CFRA Research believes investors are undervaluing software revenue potential, potential revenue growth linked to edge computing devices, and NVIDIA’s capacity to expand its market reach while returning cash to investors, given its strong free cash flow potential.