Goldman Sachs No Longer Sees NVIDIA’s Data Center Revenue Declining Later This Year, Adds the Stock to Its Conviction List

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Another week begins with NVIDIA’s now-customary stock price upgrades and endorsements. While Stanley Druckenmiller, the chairman and CEO of the Duquesne Family Office, provided NVIDIA’s first notable endorsement of the week, Goldman Sachs now appears to have picked up the proverbial bullish torch by adding the high-flying GPU manufacturer to its conviction list.

Goldman Sachs has now announced in a new investment note that it no longer sees NVIDIA’s data center revenue declining in the second half of this year. Rather, the Wall Street behemoth now models “consistent growth through 1HCY25 driven by continued spending on Gen AI infrastructure by the large cloud service providers, a broadening customer profile, and multiple new product cycles (e.g. H200, B100).”

Goldman Sachs has pegged an $800 stock price target on NVIDIA, corresponding to an upside potential of around 22 percent relative to the current share price. The bank has also added the GPU maker to its coveted conviction list.

Meanwhile, it appears that NVIDIA’s latest loophole to circumvent US export restrictions to China has started yielding dividends. As we reported at the turn of the month, NVIDIA is now taking orders from Chinese firms for its H20 AI GPUs at prices that range between $12,000 and $15,000 per card, roughly compatible with Huawei’s 910B AI accelerator that retails for around $16,000 in China. Do note that export controls prevent NVIDIA from selling its advanced A100 and H100 GPUs to China. Back in November 2022, NVIDIA introduced its pared-down A800 and H800 GPUs to circumvent these export restrictions on China. However, these chips were also axed by the US shortly thereafter.

Of course, NVIDIA has been trying to smooth the ruffled feathers in China in the wake of the Biden administration’s tough stance on chip exports. After all, as of the third quarter of last year, China and Hong Kong accounted for over one-fifth of NVIDIA’s total revenue. It is hardly surprising, therefore, that Jensen Huang recently visited China, where he danced in traditional paraphernalia at an event to celebrate the upcoming Chinese New Year.

Meanwhile, Stanley Druckenmiller proved to be quite effusive about NVIDIA’s prospects in a recent Bloomberg interview, indicating that his firm will maintain its stake in the GPU manufacturer for “at least 2 to 3 years, and maybe longer.” Bear in mind that NVIDIA is currently the largest holding in the Druckenmiller fund.

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