Nvidia (NVDA) -) shares extended gains Tuesday after a pair of Wall Street firms boosted their price targets on the chipmaker heading into its second-quarter earnings report next week.
UBS analyst Timothy Arcuri, who carries a buy rating on the stock, increased his price target by $65 to $540 a share. He called Nvidia a "kingmaker" in the AI chip sector.
"Demand will dictate Nvidia's long-term AI revenue opportunity, but supply should be the primary determinant for its data center revenue at least through C2024," Arcuri said.
"Nvidia is quite literally serving as 'kingmaker' as a huge wave of capital and new financing vehicles are chasing new AI software and specialized cloud infrastructure models while enterprises are still very early in a struggle to access enough capacity to build out AI at scale."
Wells Fargo, meanwhile, added $50 to its objective, taking it to $500 a share.
The moves come as analysts add to Wall Street's bullish outlook for AI chip demand, a segment in which Nvidia has a large and growing lead, over the second half of the year.
Securities and Exchange Commission filings late Monday also showed that the billionaire investor Dan Loeb, through his Third Point hedge fund, added 500,000 Nvidia shares over the second quarter.
Nvidia shares were marked 2% higher in mid afternoon trading and changing hands at $446.14. The market move followed on from a 7.1% gain in the Monday session that was linked to a note from Morgan Stanley.
Morgan Stanley: NVDA benefits from AI outlays
Morgan Stanley analyst Joseph Moore, who carries an overweight rating and $500 price target on the stock, said a "fairly exceptional" supply-demand imbalance in the artificial-intelligence-chip sector, as well as a massive shift in spending toward the emerging technology, is likely to persist over the near term.
Nvidia will report its second-quarter earnings after the close of trading on Wednesday Aug. 23, with indications suggesting it will report a bottom line of $2.07 per share on revenue of $11.131 billion.
Earlier this spring NVDA forecast current-quarter revenue of around $11 billion, more than 50% ahead of Wall Street estimates, with a gross margin of around 70%. That likely equates to earnings in the region of $2.04 a share.
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