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Nvidia Named a Top Play by Evercore ISI Ahead of Earnings Season

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Evercore ISI Bullish on Nvidia as Earnings Season Approaches

Evercore ISI has expressed a positive outlook on Nvidia, the best-performing S&P 500 stock this year, as the upcoming earnings season draws near. The firm has labeled the chipmaker as a top play and has maintained its outperform rating and $600 price target for the company. This projection suggests a potential 36.2% upside for Nvidia, a prominent semiconductor company. Analyst Matthew Prisco emphasized Nvidia's strong positioning in the AI sector, citing the sustainability of AI spend and the potential for beat/raise performance during the earnings season. Prisco also highlighted the company's attractive valuation.

Earnings Season and Industry Preference

The corporate earnings season is set to commence next week, with major banks such as JPMorgan Chase, Wells Fargo, and Citigroup scheduled to report. Nvidia, on the other hand, is expected to release its results in November. Prisco specifically pointed out Nvidia's prominence in the semiconductor industry, expressing a preference for exposure to AI-leveraged names within the sector. Nvidia's highly sought-after chips for artificial intelligence have solidified its reputation as an AI powerhouse.

Positive Outlook and Future Prospects

According to the Evercore ISI analyst, Nvidia's demand is expected to remain sustainable throughout the first half of 2024. Additionally, there are anticipated demand inflections in networking and high-bandwidth memory (HBM). Nvidia stands out among semiconductor leaders, with attractive earnings power projections for 2025. Prisco acknowledged the possibility of cloud digestion due to the current magnitude of spending but remained optimistic about underlying demand trends, suggesting that any potential impact would be better-than-feared. He concluded by affirming that it is premature to abandon the AI train, emphasizing that Nvidia remains their preferred play. — Contributed by Michael Bloom, CNBC. (Note: The content has been edited for grammar and clarity.)

Implications for New Business Formation

Evercore ISI's bullish stance on Nvidia, a leading semiconductor company, could have significant implications for new business formation, particularly in the tech sector. With Nvidia identified as a top play and its strong positioning in the AI sector, startups and emerging businesses might take cues from its successful strategies.

AI: A Key Driver

Nvidia's prominence in the AI sector, as highlighted by analyst Matthew Prisco, underscores the importance of artificial intelligence in today's business landscape. New businesses could potentially leverage AI technologies to drive growth and competitiveness. Nvidia's success story could inspire startups to invest more in AI capabilities, potentially spurring innovation and growth in this field.
Attractive Valuation and Sustainable Demand
Prisco's emphasis on Nvidia's attractive valuation and the sustainability of its demand through the first half of 2024 suggests a robust market for AI and semiconductor technologies. This could encourage new businesses to enter these markets, anticipating strong demand and potential growth.

Future Prospects and Market Trends

The anticipated demand inflections in networking and high-bandwidth memory (HBM) present potential areas for new business exploration. As Prisco suggests, it is too early to abandon the AI train, signaling continued opportunities in this space. New businesses could capitalize on these trends, positioning themselves for success in these burgeoning markets. In essence, Evercore ISI's positive outlook on Nvidia could serve as a roadmap for new businesses, highlighting the potential of AI and semiconductor technologies as key drivers of growth and competitiveness in the tech sector.
Story First Published at: https://www.cnbc.com/2023/10/05/evercore-isi-calls-nvidia-a-top-play-as-the-earnings-season-approaches.html
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