On Wednesday, Tigress Financial Partners updated their outlook on NVIDIA Corporation (NASDAQ:NVDA), raising their 12-month price target to $985 from a previous target, while maintaining a Buy rating on the stock.
The firm cited NVIDIA's strong position at the forefront of accelerating artificial intelligence (AI) adoption across various industries as the key driver for the revised target and optimistic outlook.
NVIDIA recently reported a record-breaking Q4 revenue of $22.1 billion, marking a 256% year-over-year increase. This surge was attributed to accelerated computing and generative AI, which have reached a tipping point, resulting in high demand globally.
The data center segment was particularly strong, with revenue climbing 409% year-over-year to a record $18.4 billion, fueled by substantial demand from large cloud service providers, specialized GPU cloud services, enterprise software firms, and consumer internet companies.
The company has also announced significant partnerships and collaborations that are expected to bolster its growth. These include working with Google (NASDAQ:GOOGL) to optimize NVIDIA's data center and PC AI platforms for Google's open language model Gemma, and expanding its strategic collaboration with Amazon (NASDAQ:AMZN) AWS to host NVIDIA DGX Cloud on AWS.
Moreover, NVIDIA is making inroads into the healthcare sector, with Amgen (NASDAQ:AMGN) set to use the NVIDIA DGX SuperPOD for drug discovery, diagnostics, and consumer medicine insights.
NVIDIA's gaming revenue saw a 56% year-over-year increase to $2.9 billion, following the launch of the GeForce RTX 40 SUPER Series GPUs. Despite a 4% decline in automotive revenue, NVIDIA announced further adoption of its NVIDIA DRIVE platform. Professional Visualization revenue grew by 105% year-over-year to $463 million.
The firm's analyst highlighted NVIDIA's industry-leading AI capabilities, which are well-positioned to capitalize on the rollout of AI-integrated functionality and its cloud-based AI services.
The company's strategic moves in generative AI applications, which are crucial for creating interactive digital content, along with its visual data processing leadership and ongoing data center adoption, are expected to continue driving significant returns on capital and shareholder value.
The new price target reflects over a 25% potential return from current stock levels.
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