Nvidia
shares were rising Monday, on track to add to their gains after a record close on Friday. More signals about demand for the chip maker’s artificial-intelligence hardware come later this week.
Nvidia
shares were up 2.9% at $680.44 in early trading Monday. Nvidia stock closed up 5% at $661.60 on Friday, a new high. Shares gained on a series of earnings reports in which large-cap technology companies such as
Meta Platforms
and
Microsoft
flagged higher investment in AI technology,
“Forward-looking commentary on Gen AI [generative AI] related capital spending was consistently positive across all major U.S.-based hyperscalers,” Goldman Sachs analyst Toshiya Hari wrote in a research note on Monday.
Hari said he now expects capital spending on cloud computing to rise 26% this year from 2023 levels, and 5% growth next year. That supports sustained demand for Nvidia’s hardware.
Hari raised his 12-month price target on Nvidia stock to $800 from $625 and reiterated a Buy rating on the stock. The new price target implies a price-to-earnings multiple of 27 times Goldman’s forecast for Nvidia’s earnings in 2025.
On Friday, Raymond James analyst Srini Pajjuri reiterated a Strong Buy rating on the chip maker, saying large technology companies appear to be making progress in earning money from generative-AI projects.
Attention will now turn to Nvidia’s earnings on Feb 21. Nvidia is expected to report a profit of $4.53 a share for the quarter ended in January, up from 88 cents in the same period a year before, according to a FactSet consensus. Sales are expected to more than triple to $20.19 billion.
Goldman’s Hari forecasts Nvidia will report 20% growth in its data-center business from the prior quarter.
Those looking for early clues as to Nvidia’s performance will be watching
Monolithic Power Systems,
which reports on Wednesday. Monolithic’s power-management devices are used in Nvidia’s graphics processing units, including the flagship H100 chip.
Nvidia shares were outperforming the stocks of other chip makers on Monday.
Advanced Micro Devices
was down 1.4% in morning trading and
Intel
was up 0.5%.
Nvidia shares had risen 27% over the past month as of Friday’s close, compared with a 4.1% rise for the
S&P 500
and a 7.6% increase in the
Nasdaq Composite
Index.
Write to Adam Clark at [email protected]
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