Analyst Matthew Ramsay of Cowen & Co. believes that Nvidia’s recent blowout forecast is just the tip of the iceberg, as the chip company continues to gain momentum.

According to Ramsay, Nvidia’s fiscal second-quarter revenue is now estimated to reach $12 billion, surpassing last quarter’s impressive guidance trend line of $11 billion. This revised figure represents an increase from Ramsay’s previous estimate.

Ramsay attributes this growth to the demand for Nvidia’s datacenter business, which is supplying the ongoing AI arms race among hyperscalers. He highlights the significant demand for Nvidia’s A100 cards and H100-based servers, as well as the company’s L40/L4 inference platform.

Not only has Ramsay adjusted his revenue expectations, but he has also raised his profit forecast for Nvidia’s current quarter. He now expects adjusted earnings per share of $2.28, up from his previous estimate of $2.04.

Investors can look forward to Nvidia’s quarterly results, which are scheduled to be reported on August 23.

Nvidia Raises Revenue Targets for Fiscal Years 2024 and 2025

Nvidia, a leader in the AI market, has revised its revenue targets, expressing optimism about the future. The company now anticipates reaching $46.3 billion in revenue for fiscal year 2024, up from the previous projection of $41.3 billion. Additionally, Nvidia has increased its top-line projection for fiscal year 2025 to $65.1 billion, compared to the previous estimate of $53.8 billion.

The upward revisions are primarily driven by growth in the datacenter segment. According to industry analyst Ramsay, Nvidia’s datacenter business is expected to grow by approximately 50% in fiscal year 2025, following a doubling in growth in fiscal year 2024. While these numbers may seem extraordinary for a company of Nvidia’s size, Ramsay believes that the demand and supply for their products will be sufficient to support such significant revenue growth. The sustainability of this growth trajectory will be crucial.

Ramsay, who has an outperform rating on Nvidia shares, maintains a price target of $500. He views Nvidia as a top pick and advises investors not to overanalyze the situation or doubt the company’s potential. Despite restrictions in China, Nvidia continues to lead in all important AI verticals.

Analysts assert that there is no alternative to Nvidia when it comes to AI stock investment opportunities. As the company extends its dominance, competitors like AMD are beginning to follow closely.

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