Nvidia (NASDAQ:NVDA) shares gained nearly 3% Monday after another investment bank raised their target price on the stock ahead of the chipmaker’s long-awaited GTC global artificial intelligence conference set to kick off Monday.
Notably, analysts at HSBC Global Research lifted their target price on NVDA from $880 to $1,050, implying nearly 20% more upside from current levels.
“We are encouraged by Nvidia’s AI product roadmap which focuses on moving beyond GPUs and towards owning the entire value chain,” analysts said in a note.
“This will take shape next year given GB200 AI platform (a potential focus at next week’s GTC) will incorporate both Grace Hopper CPU and B200 AI GPU, implying Nvidia is using its own in-house CPUs for the first time,” they added.
The analysts believe this will enable the tech giant to secure more significant average selling price (ASP) pricing power with its GB200 chip.
Before any of these developments take effect, Nvidia must navigate through 2024 as it transitions from producing older generation AI GPUs, such as the H100, to the forthcoming B100 model, the analysts commented.
They expect this shift to take place in late Q3 or Q4 of 2024. Consequently, the analysts think the current tightness in chip-on-wafer substrate (CoWoS) capacity is set to relax in the second half of 2024, reflecting HSBC’s anti-consensus view.
“We do not see Nvidia beating estimates for the next couple of quarters as it continues to sell older generation chips.”
Apart from the target price, the analysts also raised the FY26 EPS forecast for NVDA by 18% to $35.30, accounting for a shift to higher-priced B series GPUs and the GB200 product and revenue from new markets.