Opportunities for generative AI are expected to be a big focus at Nvidia Corporation's (NASDAQ:NVDA) 2023 GTC conference next week, according to analysts at Wedbush Securities.
Of the 650 sessions at GTC, more than 10% are focused on generative AI, the analysts pointed out in a note to clients.
With the recent excitement around AI spurred by OpenAI’s chatbot ChatGPT, Nvidia’s share price has climbed in recent months as investors seek exposure to AI stocks.
The analysts wrote that they also expect some product updates to both Nvidia’s gaming and data center portfolio.
While Wedbush doesn't expect a change to current expectations or a shift in the longer-term total addressable market that Nvidia has previously laid out, more colour is expected around how new foundational models and Nvidia’s DGX cloud might fit into the company’s longer-term financial outlook.
“We would assume generally DGX cloud should have a Software-as-a-Service (SAAS) type margin with foundational models providing some upside flex, depending on the proportion of DGX cloud customers who opt into these overlays,” they wrote.
DGX cloud and Nvidia’s foundational models could also benefit the company beyond incremental revenue by enabling smaller customers to invest in AI development, thereby potentially accelerating total addressable market growth.
‘Neutral’ remains Wedbush's rating on the stock with a target price of $216 based on a PE multiple of about 30x applied to 2026 financial year earnings plus net cash.
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