Nvidia is likely to report first-quarter results on Wednesday that show investments in artificial intelligence and metaverse offerings are paying off and offsetting much of the chipmaker's semiconductor sales loss due to ether mining.
The chipmaker was one of the best-placed companies in the semiconductor sector this year, given its dominance in generative AI and multiple new product cycles in its data center and gaming divisions, according to KeyBanc Capital Markets, the corporate and investment banking arm. from KeyCorp in Cleveland
"We see limited competitive risk and expect Nvidia to continue to dominate one of the fastest-growing cloud and enterprise workloads," KeyBanc analysts wrote in a note on Sunday, adding that Omniverse, Nvidia's platform metaverse for creating and managing industry 3D applications. , "Represents a software subscription revenue stream that is likely to support further multiple revaluations as it grows and scales."
KeyBank reaffirmed an overweight (outperform) rating on the company's stock and raised its price objective to $375 from $320. Shares last traded at around $308 on Tuesday. .
Wedbush Securities analyst Matt Bryson gave the stock a neutral rating, with a more conservative price target of $290 (up from $216), but agreed that "at least a headwind from Nvidia on AI demand is looking to create over the next 12 months." , there is no "fundamental barrier to supplies".
The questions investors should focus on, he said, are what long-term opportunities Nvidia has in AI, such as the efficiency gains it can bring that will translate into labor savings in IT costs, and how much does it make a profit?
Wall Street analysts expect Nvidia's first-quarter sales to be $6.5 billion, down 22 percent from $8.3 billion last year, with EPS of 92 cents, down 17 percent 1. From $11, reports Bloomberg. Net income is expected to be $2.2 billion, up from $2.8 billion reported in May last year.
The decline reflects a loss in revenue from sales of graphics processing units, a type of semiconductor used to mine ether. Ethereum:
The bet seems to have paid off. The artificial intelligence boom, fueled by OpenAI chatbot ChatGPT, has increased the demand for GPUs. Along with the US ban on selling artificial intelligence chips to China, major Chinese companies such as Baidu
In March, Nvidia announced an alliance with Microsoft