Colello expressed optimism about Nvidia's future, particularly in the AI workload sector, and predicted that the company's data center business will generate $41 billion in revenue by fiscal 2024. He dismissed concerns about Nvidia's current business surge being short-lived, instead forecasting further growth of $60 billion in data center revenue in fiscal 2025, rising to $100 billion in fiscal 2028. Wall Street now has 54 "buy" ratings and five "hold" ratings for Nvidia.
Key takeaways:
- There are no more 'sell' ratings for Nvidia on Wall Street following its strong second-quarter earnings, with Morningstar being the last firm to ditch its bearish view.
- Nvidia reported second-quarter revenue of $13.5 billion, beating analyst estimates of $11.1 billion, and expects third-quarter revenue of about $16 billion.
- Morningstar Research analyst Brian Colello upgraded Nvidia to 'hold' from 'sell', increasing his 'fair value' estimate for Nvidia to $480 from $300.
- Despite concerns that Nvidia's current surge in business is a pull-forward in demand that will be short-lived, Colello anticipates further growth of $60 billion in data center revenue in fiscal 2025, rising to $100 billion in fiscal 2028.