Piper Sandler has selected NVIDIA as its top pick, maintaining a positive outlook on the company despite its significant stock price gains in 2023. The investment bank believes NVIDIA still has 20% more upside potential.
On Monday, Piper Sandler analyst Hasi Kumar reiterated his Buy rating on NVIDIA and raised his target price from $140 to $175. Despite a remarkable 198% surge in NVIDIA’s stock this year, Kumar’s upgrade reflects continued optimism about the company’s prospects, mainly driven by its next-generation AI semiconductor, Blackwell.
Kumar forecasts that the AI accelerator chip market will exceed $70 billion next year, with NVIDIA poised to capture a significant share of this expansion. He pointed out that competitors like AMD will likely secure only a small portion of this rapidly growing market.
AI accelerators—key components that enhance the efficiency of AI and machine learning applications—are expected to be a significant growth driver in the coming years. In its third-quarter earnings report, Kumar noted that big tech companies such as Microsoft, Meta Platforms, and Amazon continue investing heavily in expanding their AI infrastructure. This trend is expected to persist. This creates a highly favorable environment for NVIDIA, well-positioned to benefit from this sustained demand.
Looking ahead, Kumar is optimistic that NVIDIA’s Blackwell AI semiconductor will be ready for large-scale production by the first quarter of next year. He projects quarterly revenues to reach between $5 billion and $8 billion, driven by strong demand for Blackwell GPUs and Grace Blackwell chips optimized for inference applications. Kumar expects Blackwell design revenues to see over 200% growth in Q1, overcoming any initial supply constraints.
Despite this bullish outlook, NVIDIA’s stock saw a dip following reports that the Biden administration is expected to impose tighter restrictions on exporting advanced semiconductors to China. The stock closed at $145.26, down $2.37 (1.61%) from the previous weekend.
However, looking at the longer-term trend since the U.S. election on November 5th, NVIDIA has experienced a strong recovery, with its stock rising 6.77% over that period.
