Goldman Sachs Says Buy Nvidia: Analyst Sees Nvidia as the King of Accelerated Computing
James Schneider, an analyst at Goldman Sachs, began covering NVIDIA Corporation’s stock on July 10 with a “Buy” rating and a $185 price target. According to Schneider, Nvidia stands to gain the most from the continuous expansion of AI infrastructure. In addition to product leadership, quick new releases, and an appealing value that can contribute to medium-term stock outperformance, the company’s growing client base is a positive indication.
Nvidia is a fabless provider of GPU technology and related software (CUDA), and we see it as the industry standard in accelerated computing. Although stock price action has been choppy due to ‘peak concerns’ and the growing presence of custom accelerators, we believe that a combination of (1) product leadership and rapid cadence of introductions; (2) broadening of the customer base; (3) early signs of AI monetization; and (4) attractive valuation can drive outperformance versus our coverage.
Schneider
Nvidia’s GPU Dominance Fuels Massive AI Industry Expansion
Schneider emphasized that Nvidia is well-positioned to benefit from the rapid expansion of artificial intelligence infrastructure due to its dominance in the GPU and AI accelerator sectors. The demand for Nvidia’s state-of-the-art chips is still high as cloud providers, businesses, and governments increase their investments in AI. The company’s leadership in this rapidly expanding industry is strengthened by its unrivaled product roadmap and capacity to provide creative solutions before rivals.
Nvidia’s Growth Strategy Signals More Outperformance Ahead
Schneider contends that Nvidia‘s valuation is still appealing considering the magnitude of potential in the data center and artificial intelligence markets, even in light of the company’s remarkable stock success in recent years. The company’s growing client base and strong profit margins, according to the analyst, put it in a strong position to maintain above-market growth rates. As Nvidia continues to implement its growth strategy and capitalize on secular trends in AI usage, medium-term outperformance is anticipated.
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