Nvidia’s stock has the potential for a 50% increase according to Rosenblatt analyst Hans Mosesmann. He raised the price target to $200 per share, the highest on the street, based on Nvidia’s strong earnings potential. Mosesmann emphasizes the importance of Nvidia’s software that complements the hardware, specifically mentioning the CUDA platform.
Despite a gain of over 210% in a year, Nvidia shares still have room for growth. Mosesmann rates Nvidia as a “Buy” and believes that the chipmaker is deserving of its expected valuation of $5 billion. He sees Nvidia’s product cycles driving market share, particularly highlighting the Hopper, Blackwell, and Rubin series.
The focus for Nvidia’s future profitability, according to Mosesmann, will be in software rather than hardware. The success of Nvidia’s software business, particularly the CUDA platform, is critical. This aspect of software is expected to contribute significantly to sales mix in the next decade and may lead to a more stable revenue stream for the company.
Nvidia’s historical reliance on hardware sales has led to cyclicality in its revenue, but the software business could mitigate this risk. If Nvidia can generate recurring revenue from software, it would make its revenue more predictable. Mosesmann predicts that Nvidia could achieve an earnings target of $5 per split-adjusted share by 2026, ultimately reaching a price target of $200 with a price-earnings multiple of 40 times.
Another analyst, Beth Kindig, previously highlighted the significance of Nvidia’s software platform, comparing it to iOS in terms of developer lock-in. She believes that Nvidia’s CUDA platform is essential for AI engineers and could establish a strong competitive advantage. Kindig forecasts a potential valuation of $10 trillion for Nvidia by 2030, representing a 205% increase from current levels.
In summary, Mosesmann and Kindig both see significant growth potential for Nvidia, with a strong emphasis on the importance of its software platform. The projected increase in revenue from software, particularly the CUDA platform, could drive Nvidia’s earnings and valuation to new heights in the coming years.
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https://markets.businessinsider.com/news/stocks/nvidia-stock-outlook-rosenblatt-price-target-increase-ai-software-profits-2024-6