As this genuinely intelligent publication presciently forewarned, Wall Street’s Artificial Intelligence virus has finally made the leap from thematic to corporate and chosen its patient zero.

That my friends, as of a few hours ago, is the chip-designing US graphics card maker, now data centre conquerer Nvidia (NVDA).

The share price of the official semiconductor/generative AI proxy has been nutty all year, but that last 24 hours has seen it go the full pistachio (up a further 26% in a few hours of after session trade), and now, at around US$940 billion, its near US$1 trillion market valuation suddenly makes NVDA the 6th largest company in the world.

A few more weeks of this, and it’ll do Amazon (AMZN) for No 4 should its stock hit US$600. Then it’ll be on to Alphabet (GOOGL).

NVDA’s supremely anticipated Q1 numbers dropped Wednesday night New York time and did not disappoint, with even the horniest bulls on Wall Street a little gobsmacked by the sheer virility of its Q1 beat and by the Obamanian audacity of its forward guidance.

All these things and more were light years ahead of analyst estimates. In the 24 hours since the numbers dropped Nvidia stock’s price target has been lifted by 30 brokers covering the stock.

The long and short: the numbers seemed to frighten bear, bull and human alike.

Via NVDA

“It added more to its market capitalisation in a single after-hours trading session than the market capitalisations combined of three of Australia’s big four banks,” Global X investment analyst David Tuckwell told Stockhead’s Nadine McGrath.

“That is a stupendous rally in after hours trading and we haven’t really seen anything like it before.”

Rather than bore you with their sheer enormity – other than to mention NVDA stock (already well over 100% YTD) jumped 24% before markets opened, Thursday – maybe let’s just quickly go around the room for some balanced reactions from the wonderfully articulate and highly paid professional analysts.

 

Bernstein analyst Stacy Rasgon:

“We have never seen a (forward) guide like the one Nvidia just put up.”

 

Craig-Hallum analyst Richard Shannon: (upgrade to Buy)

“Truly amazing.” And “without precedent”.

Largely thanks to NVDA’s AI segment. Shannon hoisted PT to from US$190 to… US$500.

 

JPMorgan analyst Harlan Sur (reiterates Overweight rating):

“(NVDA’s Q1) is the first massive wave of demand in generative AI… there’s more gains to follow.”

Sur’s shiny new JPM Price Target for NVDA is a straight US$500, easily 2x its previous target a few hours before.

 

Cowen analyst Matthew Ramsay (upgrade to Buy):

“Overall, NVIDIA’s results and guide leave us with our jaws dropped… the technological leadership in AI is being monetized and seems to be blasting through any lingering bear thesis concerns…”

 

Evercore analyst C.J. Muse (reiterates Outperform rating):

“What can we say other than just… WOW!

“We’ve simply never seen a beat like this… ever.”

Muse also raised Evercore’s PT to US$500 on the results, up from US$320.

Muse then mused over the long and luscious road of growth NVDA has ahead, calling it “a long one”, before confirming NVDA has taken its place among Evercore’s Apple (APPL) and Alphabet (GOOGL) as their top holdings.

 

Baird analyst Tristan Gerra (upgrade to Outperform from Neutral):

“It’s the AI wave in formation.”

Gerra upgraded the stock and also pumped its PT by well over a third, to US$475 from US$300.

 

Barclays Analyst Blayne Curtis: (reiterates Overweight rating)

“The market is moving quickly and NVDA seems to be the only solution ready to power this wave of LLMs… The expectation was always that NVDA would see a jump in its Data Center (DC) business, but this was at least a quarter early and extraordinary in magnitude.”

Via NVDA

Ross Seymore at Deutsche Bank: (upgrade to Buy): 

“Just wow.”

(Creative prose isn’t a broker specialty, you might have noticed.)

Hans Mosesmann at Rosenblatt: (upgrade to Buy):

A nearly 100% bump from $320 to $600, implying 38% upside from Nvidia’s $375 share price Thursday.

Alan Priestley at Gartner:

“NVDA is the leading technology player enabling this new thing called artificial intelligence.”

“What Nvidia is to AI is almost like what Intel was to PCs.

 

Here’s your numbers then

Nvidia’s market cap is US$160 billion more than it was before, so it shattered consensus expectations for quarterly sales and profit in its Wednesday afternoon report as the chipmaker largely powering the artificial intelligence boom cashes in.

For Q2, Nvidia says it expects revenue of around $11 billion — which is more than 50% above what analysts had expected — despite the slide in PC sales and thanks to the surging demand for AI chips.

  • Q1 revenue of $7.19 billion,  down 13% from a year ago and up 19% from the previous quarter
  • NVDA also hit record quarterly Data Center revenue of $4.28 billion
  • GAAP earnings per diluted share for the quarter were $0.82, up 28% from a year ago and up 44% from the previous quarter
  • Non-GAAP earnings per diluted share were $1.09, down 20% from a year ago and up 24% from the previous quarter
  • During the first quarter of fiscal 2024, NVDA palmed off some US$99 million in cash dividends to share holders.

“The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” said Jensen Huang, Nvidia founder and CEO.

“A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.

“Our entire data center family of products — H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand and BlueField-3 DPU — is in production. We are significantly increasing our supply to meet surging demand for them,” he said.

A windfall of income

Via NVDA

Josh Gilbert, market analyst at eToro, said there was little to no room for error for Nvidia this quarter, and they got the memo.

“Strength from Q1 earnings came from Data Center revenue, which saw a 14% jump, helping to offset further weakness in its gaming segment. In addition, net income surpassed expectations by almost 20%, further underscoring its robust performance.

“Nvidia shares have climbed by more than 100% in 2023 thanks to investors’ excitement surrounding AI, and the chip maker’s forecast for the second quarter shows that their business will continue to thrive as they power artificial intelligence software.

“Its revenue guidance is for USD$11 billion in Q2, surpassing analyst estimates of USD$7.18 billion.”

Josh says what’s got the punters so excited is that AI technology is still in its infancy.

“This provides plenty of tailwinds for Nvidia while it continues to benefit from the electrification of vehicles, the transition to cloud technology, as well as being a leader in the chip market for PCs and gaming,” he said.

“Investors are being very well rewarded for their faith.”

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