Nvidia’s Blowout Earnings Push Market Value Up Over $800 Billion

Text size

Nvidia

shares roared to record levels on Thursday as Wall Street analysts gushed over the company’s October quarter results and forward outlook.

Nvidia

stock (ticker: NVDA) rose 10.6%, to $323.51 in Thursday trading. The

S&P 500
was up 0.3% while the

Dow Jones Industrial Average
was down 0.3%.

If such gains hold, it would be a record close and bring Nvidia’s market value to about $808 billion. Shares are up about 148% year-to-date.

Raymond James analyst Chris Caso raised his price target to $365 from $225 and maintained a Strong Buy rating in a note following the earnings release on Wednesday.

He wrote that the graphics card maker crushed analyst expectations for its fiscal third quarter while its forecast for January quarter revenue of about $7.4 billion was even better. He points to an increasing supply and accelerating data center demand as positive signs.

“In the near-term, NVDA’s revenue has only been constrained by supply, and increased supply availability – and increasing supply is boosting revenue,” Caso wrote. “Long-term commitments are intended to ensure supply increases moving forward, as they prepare for what’s expected to a very robust datacenter spend from both cloud and enterprise customers in 2022.”

The stock had a sky-high bar set in recent weeks by the company’s surging valuation. Investors and analysts believe the metaverse will provide a multi-billion dollar opportunity for the company to supply chips to power virtual world graphics.

The company’s Omniverse open platform, where designers and artists are able to collaborate virtually and create 3D worlds, has stoked even more metaverse excitement.

“Longer-term, the incremental opportunities from Omniverse and software are difficult to quantify since these are brand new markets,” Caso wrote. But he pointed to artificial intelligence graphics processing units, which have become the base of a $10 billion business for Nvidia. “We know the potential for these new markets are large, and that NVDA possesses leadership in these markets.”

The shares are up despite concerns by the U.S. Federal Trade Commission about Nvidia’s acquisition of chip designer Arm. Executives said during the company’s earnings conference call that Arm licensees have expressed concerns about the deal.

Arm licenses…