Economy Nvidia shares signs of a machine learning boom

Nvidia shares signs of a machine learning boom

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "(Reuters) – Shares of Nvidia Corp rose 6% on Friday after the chipmaker stunned analysts with strong quarterly results and joined rivals Intel Corp. and Advanced Micro Devices Inc in predicting strong demand for chips used in the latest generation of data centers and AI. “data-reactid =” 22 “> (Reuters) – shares of Nvidia Corp. rose 6% on Friday after the chip maker stunned analysts with strong quarterly results and joined rival Intel Corp. and Advanced Micro Devices Inc. predicting the strong demand for chips used in the latest generation of data centers and AI.

At least eleven brokers have raised the price targets for the company’s stock. Brokerage Cowen & Company was the most optimistic, increasing its target by $ 85 to $ 325, above Wall Street’s average price of $ 285.15 and Friday’s pre-market price of $ 287.

Susquehanna’s analysts said that while they expected the data center demand to exceed market consensus expectations, they had never anticipated such an upward trend.

“Nvidia’s dream-dream-AI story is on the right track again,” said the broker’s analysts in a message to customers.

Chipmakers have had a roller coaster ride in the past two years when Donald Trump’s trade war with China and the boom in mobile phone development and sales subsided. In contrast, new markets for self-driving cars, devices for the Internet of Things and the huge data centers required for the booming e-commerce and new online functions are still developing.

Revenue from Nvidia’s data center business, which serves customers developing artificial intelligence products, increased 43% to $ 968 million in the fourth quarter. Jefferies analysts forecast a 34% increase this year.

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The chipmaker also forecast sales in the first quarter that were above estimates, despite expecting a $ 100 million outbreak from the corona virus outbreak. The strong forecast also helped fuel expectations of a recovery in chip demand.

“Given solid product cycles in the gaming sector and continued strong demand from data center customers, we continue to see an upward distortion in sales, margins and earnings in the further course of fiscal year 21,” the analysts from J.P. Morgan in a message.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Nvidia was the second chipmaker after Qualcomm Inc to warn of the potential impact on its business of the coronavirus outbreak, which has left Chinese companies struggling to restart production after an extended new year holiday. “data-reactid =” 30 “> Nvidia was the second chip manufacturer after Qualcomm Inc. to warn of the potential business impact of the coronavirus outbreak, which has caused Chinese companies to have difficulty resuming production after an extended New Year’s holiday.

According to Cowen analysts, Nvidia also benefited from pent-up demand after cloud customers under-invested in the first half of 2019, and accelerated the demand for conversation AI where computers engage in human-like dialogue.

(Reporting by Akanksha Rana in Bengaluru)

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