Piper Sandler’s analysts maintained an Overweight rating on Nvidia (NASDAQ:NVDA) with a target price of $620 per share. Additionally, they selected NVDA as Piper Sandler’s new Top Large-Cap Pick, taking over from Advanced Micro Devices (NASDAQ:AMD). This decision is based on several factors.
Firstly, the analysts noted in a client memo that NVDA’s valuation now appears significantly more attractive compared to AMD. Secondly, NVDA’s comprehensive compute stack is recognized for its efficiency and competitive edge at the system level. Thirdly, there is an anticipation that software licenses will increasingly contribute to Nvidia’s total revenue, thereby expanding its Total Addressable Market (TAM).
The analysts believe that while fiscal year 2025 is not fully accounted for yet, NVDA shows promising visibility into that year, supported by a strong backlog and favorable demand trends. Additionally, they expect a new chip for the China market to start contributing to Nvidia’s revenues, potentially reaching $2.5 to $3 billion per quarter once it is fully operational, beginning from the April quarter.