Oppenheimer analyst Rick Schafer maintained Nvidia Corp. (NASDAQ:NVDA) with an outperformance rating and raised the target price of $150 to $175.
Oppenheimer’s Rick Schafer reiterated his bullish stance on Nvidia ahead of the company’s third-quarter earnings report scheduled for November 20. Schafer expects a substantial rise in Nvidia’s October quarter results and January quarter guidance, driven by continued demand from cloud service providers (CSPs). and corporate clients for AI accelerators.
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Schafer revised his estimates upward, citing strong traction from Nvidia’s Hopper AI accelerators and the initial ramp-up of new Blackwell chips, which will likely begin in the fourth quarter.
It forecasts Blackwell will contribute several billion dollars of revenue for the January quarter despite continued supply constraints related to CoWoS-L capacity.
The analyst expects Blackwell’s sales to accelerate significantly by the first quarter (April), with investors eyeing between 5 and 6 million GPUs next year.
In 2025, Schafer expects the product mix to favor air-cooled HGX modules and NVL36 GB200 racks because they integrate more easily into existing data center infrastructures. He said the liquid cooling issues could take time to resolve.
Nvidia’s rack-mount solutions, which include processors and networking components, could offer an average selling price (ASP) 10 times higher than standalone modules.
Schafer sees Nvidia’s Data Center (DC) segment, which represents 87% of total revenue, growing 9% quarter-over-quarter (QoQ) and 97% year-over-year. other (YoY) in the third quarter, led by the H200 chip. .
The broader Blackwell product line will likely increase in the first quarter, with future iterations like the Blackwell Ultra planned for late 2025. Schafer estimates that 60% of data center sales will come from training, while 40% will come from inference.
He predicts sales of sovereign AI projects will exceed $10 billion this year, although this could face long-term risks from possible US export restrictions.
For the Networking segment, which represents 14% of Nvidia’s data center revenue, Schafer forecasts a 9% quarter-over-quarter increase and 60% year-over-year growth, driven by robust Spectrum Ethernet switch shipments. -X and DPU.
He expects Nvidia’s next-generation Spectrum-X800 to launch in 2025, aimed at large-scale accelerator clusters, followed by the Spectrum-X1600 in 2026.
In the Gaming segment, which accounts for 10% of revenue, Schafer expects growth of 5% quarter-on-quarter and 6% year-over-year in the third quarter, fueled by strong sales of GPUs for discrete PCs.