Nvidia
Loop Capital launched research coverage of Nvidia (NASDAQ:NVDA) with a Buy rating and $1,200 price target, a Street high.
“Initiating Buy and $1200 PT (63% appreciation) as we believe not only is there material upside to Street estimates in CY2024/FY2025 & CY2025/FY2026 but that we are at the front end of a 3 – 5 year GPU compute & Gen AI foundational build across Hyperscale,” Loop Capital analysts stated.
Friday premarket, NVDA climbed 1.8%.
The analysts note the rise of private silicon providers and big players like AMD and INTC, as well as the projected arrival of Hyperscale-specific internal silicon solutions.
They believe that Nvidia’s major clients will accept “everything NVDA can give them in 2024 and 2025.”
Loop Capital found that Hyperscalers are using 50% to 60% GPU compute, up from 10%.
It also noted that its Hyperscale talks showed that generative AI is driving GPU-based computing.
This development verifies Nvidia CEO Jensen Huang’s early prediction that GPU computing is needed for breakthrough AI applications.
“This harkens back to hues of the internet buildout (Figure 9) where adoption/buildout went up 5x (up to 60% saturation) from 1995–2001,” analysts added.
Generative AI also drove a large increase in Fortune 1000 IT investment in 2024, according to the experts.
IT spending is expected to expand 5-8% in 2024, up from 5% in 2023 and 3-5%, while infrastructure spending is expected to rise from 30% to 45%.
“F1000 realized they need to move more data into the Cloud to (say 60% – 80% vs prior plans of 30% – 40%… and currently at 15% – 20%) take advantage of Gen AI and run the key applications of the future,” they added.
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