Nvidia(US:NVDA) Guotai Junan Securities·2024-08-31 04:23Investment Rating - The report maintains a "Buy" rating for NVIDIA with a target price of $138, based on a FY2026 PE of 30X [1][26]. Core Insights - NVIDIA has established a strong ecosystem in the AI engine sector, demonstrating significant hardware-software synergy and maintaining a dominant market position in AI computing and accelerated computing [1]. - The company continues to launch industry-leading products, creating a multi-dimensional monopoly advantage and accumulating scale benefits [1]. - NVIDIA's profitability in the AI computing sector remains robust, particularly in high-end GPU technology, which is expected to sustain strong demand through 2025 [1]. Financial Overview - For FY2025, NVIDIA's revenue is projected to be $127.8 billion, with adjusted net profits of $73.9 billion [16][26]. - In Q2, NVIDIA reported revenue of $30 billion, a year-on-year increase of 122%, slightly above market expectations [26]. - The GAAP gross margin was reported at 75.1%, reflecting a year-on-year increase of 5.0 percentage points [26]. - Non-GAAP net profit reached $16.95 billion, a year-on-year increase of 152%, also exceeding market expectations [26]. Segment Revenue - Data center revenue grew by 154% year-on-year to $26.3 billion, driven primarily by demand for the H series products [14][26]. - Gaming revenue increased by 16% year-on-year to $2.9 billion, indicating steady growth in this segment [14][26]. - The network business also showed significant growth, with revenue of $3.67 billion, up 114% year-on-year [26]. Earnings Forecast - The report adjusts revenue forecasts for FY2025E-FY2027E to $127.8 billion, $196.6 billion, and $232.3 billion respectively, with corresponding adjusted net profits of $73.9 billion, $114.2 billion, and $131.5 billion [16][26]. - The demand for AI computing is expected to continue growing, with next-generation LLMs anticipated to require 10-20 times the computing power currently available [26]. Market Position - NVIDIA's stock has shown resilience, with a current price of $125.61, and the company has approved an additional $50 billion stock buyback plan, reflecting confidence in its market position [19][26]. - The company is expected to maintain a strong competitive edge in the GPU market, with limited threats to its current dominance [1].