On Wednesday, Deutsche Bank (ETR:DBKGn) adjusted its outlook on NVIDIA (NASDAQ:NVDA), increasing the share price target to $850 from the previous $720, while maintaining a Hold rating on the stock. The adjustment follows NVIDIA's demonstration of its continued dominance in artificial intelligence innovation at this year's GPU Technology Conference (GTC).
Deutsche Bank highlighted NVIDIA's expansive and deep influence across a variety of applications, including 6G, drug discovery, and robotics. The company's comprehensive approach in addressing the AI market through a combination of silicon, hardware, systems, and ecosystem creation was noted as surpassing the efforts of its more narrowly focused competitors.
The introduction of NVIDIA's new GPU platform, Blackwell, was seen as a pivotal development that is expected to sustain the company's technological leadership in the coming years. This advancement is anticipated to help counterbalance the rising concerns over cost and power constraints that investors are increasingly wary of.
The bank's decision to raise the price target is supported by NVIDIA's consistent delivery of high-quality products and the evident value it provides to its customers. These factors have mitigated concerns about a potential cyclical slowdown in the near term. Consequently, Deutsche Bank has revised its growth estimates for NVIDIA's Data Center segment, expecting a stronger performance in Calendar Year 2025 with a forecast of 15% year-over-year growth, up from the previous 5%.
The updated price target is based on a projected Calendar Year 2025 earnings per share (EPS) of $28.50, up from $24, and a maintained price-to-earnings (P/E) multiple of around 30 times. While the bank acknowledges NVIDIA's impressive pace of innovation and its status as the uncontested leader in AI, it also notes that these attributes are widely recognized and reflected in the company's premium valuation, leading to the decision to maintain a Hold rating.
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