Rating Quick Look | Wall Street calls NVIDIA $1500! Apple, Taiwan Semiconductor receive positive outlook

Bank of America: Maintains NVIDIA's target price at $1500, reiterates "Buy" rating

Bank of America Securities published a research report stating that in a recent discussion with NVIDIA's CFO Colette Kress and other executives, the management's evaluation of market demand and customer interest was very positive, revealing that the only constraint is the supply chain.

Bank of America reiterated its "Buy" rating on NVIDIA, maintaining it as the top pick in the industry. The report pointed out that the company is most capable of providing artificial intelligence services for the $3 trillion IT industry. Despite facing competition in the market, Bank of America believes that NVIDIA has a leading advantage in performance, product line, existing capabilities, team, and developer support for many years, and will benefit from customers' increasing deployment of artificial intelligence.

However, Bank of America cautioned that while NVIDIA's stock price may rise, its volatility may also increase. The target price is maintained at $1500, corresponding to a forecasted P/E ratio of approximately 42 times excluding cash in 2025, while the current price is around 31 times.

Goldman Sachs: Sets NVIDIA's target price at $1200, reiterates "Buy" rating

The report mentioned that their research team attended a group meeting with NVIDIA's founder, president, and CEO Jensen Huang during the 2024 Taipei International Computer Show. Huang expressed his views on various topics during the meeting, including the ongoing shift towards accelerated computing, NVIDIA's positioning as a provider of accelerated computing platforms, the company's scale advantage, and the sustainability of the supply chain.

The bank still considers the company as an industry standard and a key driver of accelerated computing needed for developing and deploying generative artificial intelligence. They also believe that there is significant potential for earnings forecasts to increase.

UBS: Sets Apple's target price at $190, maintains "Neutral" rating

The report mentioned that Apple's App Store revenue in May increased by 12% year-on-year, showing steady growth compared to the 9% year-on-year growth recorded in April, although it remains soft so far this quarter. UBS stated that during the recent earnings conference call, the company's management expects its services business to grow at a similar double-digit rate in the first half of the 2024 fiscal year, implying a growth rate of around 12.7%.

The bank estimates that the growth rate of the App Store in the first two months of this quarter is slightly below 11%, and they estimate a growth rate of about 12.3% for the services business in the next quarter. Based on their estimation that the App Store accounts for about 25% of service revenue, other categories in the services business need low double-digit growth to meet the guidance target.

RBC Capital: Lowers Snowflake's target price from $226 to $183, maintains "Outperform" rating

Morgan Stanley: Raises TSMC's target price in Taiwan stocks from NT$928 to NT$980, rates it as "Overweight"

The report mentioned that there are reports that TSMC is considering raising production costs for NVIDIA. The bank inquired NVIDIA's opinion on TSMC's desire to increase wafer prices, and NVIDIA's CEO Jensen Huang pointed out that TSMC's service prices are too low and that TSMC's contribution to the world and the tech industry is not fully reflected in its financial reports.

The bank believes that NVIDIA's management acknowledges TSMC's reliability, which helps eliminate one of the biggest risk factors—outsourced production. Although NVIDIA has not confirmed the timing or extent of the wafer price increase, they indicated that CoWoS capacity prices are expected to rise, and they hope that TSMC can provide more supplyThe bank believes that Taiwan Semiconductor needs to raise wafer prices to maintain its target gross margin of 53% in 2025 and 2026.

In addition, the bank believes that NVIDIA is a major customer of Taiwan Semiconductor, accounting for about 10% of Taiwan Semiconductor's revenue this year. Assuming NVIDIA accepts the price increase from Taiwan Semiconductor, other key artificial intelligence semiconductor customers may follow suit. According to the bank's survey, it is estimated that Taiwan Semiconductor's wafer pricing for next year may be finalized in September or October this year. If the average price of 3nm process wafers rises by 11% over the next two years, the average price of 4nm process wafers increases by 3%, and CoWoS prices increase by 20%