Raymond James: Demand concerns "unfounded" Raises NVIDIA's target price to $1100
Raymond James has raised NVIDIA's target price from $850 to $1100 and reiterated a "strong buy" rating. The company believes that investors' concerns about NVIDIA's customer spending pause are unfounded. NVIDIA has launched the Blackwell series GPU, which has received high praise from Wall Street. This series of products enables NVIDIA to gain additional share in data center capital expenditures and continue to maintain revenue momentum in the field of artificial intelligence. It is expected that NVIDIA's Mellanox division will also benefit from the growth in demand for artificial intelligence
According to Zhītōng Finance, Raymond James has raised its target price for NVIDIA (NVDA.US) from $850 to $1100, reiterating its "strong buy" rating and stating that investors' concerns about the company's customer spending pause are "unfounded".
Raymond James analyst Srini Pajjuri, after meeting with NVIDIA's investor relations director, wrote in a report to investors: "We believe concerns about customer spending pausing before Blackwell drives growth, due to continued GPU demand outstripping supply, are unfounded. We expect H200 to be a near-term key driver, followed by the rise of B100/B200 in the second half. Recent conversations in Asia indicate a significant shift in the GB200 NVL system mix, allowing NVIDIA to capture additional share in (data center) capital spending."
Last month, NVIDIA launched the Blackwell series GPU, which received high praise from Wall Street. Pajjuri explained that besides enterprises eager to train generative AI models, markets like China are seen as sources of upside potential. Pajjuri stated, "Therefore, we expect revenue momentum to continue through 2025 as Blackwell brings notable cost ownership advantages, exponential growth in AI model complexity, and intense competition among hyperscale enterprises."
Pajjuri also noted that NVIDIA's Mellanox division is expected to benefit from AI demand driven by new products and other sovereign nations. Mellanox's current annual revenue is around $13 billion, compared to $1 billion to $2 billion in 2020. Management anticipates that InfiniBand and Ethernet products will "coexist and benefit" from the 800G cycle of Blackwell, thus Mellanox's annual revenue is expected to "roughly keep pace" with the growth of the computing business