NVIDIA Short-Sellers Cry Out in Pain as the 1995 Moment for AI Arrives on Schedule

23.02.2024 - 21:01 / wccftech.com / Rohail Saleem

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

As NVIDIA continues to confound its detractors by posting rip-roaring revenues that now habitually beat Wall Street's consensus expectations, even the hardiest of cynics are beginning to concede that AI's 1995 moment has arrived - an homage to the year when the internet truly took off, transforming the world as we know it.

In their latest investment note, Wedbush analysts assert that for every $1 that is spent on NVIDIA's GPUs, the multiplier effect on the enterprise and consumer space could be $10 or more over the next few years as "AI hits every part of the economy." The analysts go on to note:

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This view that NVIDIA's best days are yet to come is becoming increasingly common on Wall Street. For instance, Rosenblatt recently noted:

The firm has pegged a $1,400 stock price target on NVIDIA's shares.

As we noted earlier this week, NVIDIA reported $22 billion in revenue for the last quarter against expectations of $20.6 billion. Additionally, the company announced a non-GAAP EPS of $5.16 vs consensus expectations of $4.64. Moreover, the company's data center segment reported quarterly revenue of $18.4 billion vs. just around $3.6 billion in the comparable quarter last year. But it was NVIDIA's guidance for the ongoing quarter that proved to be the icing on the proverbial cake. To wit, the GPU manufacturer now expects to earn $24 billion, give or take 2 percent, in the current quarter, which is significantly above analysts' prior estimate of $22.01 billion.

Meanwhile, investors who bet against NVIDIA have been utterly decimated by the post-earnings scorching-hot rally in the stock. As per a tabulation by S3Partners, the GPU manufacturer's short-sellers collectively lost $2.9 billion on the 22nd of February.

Finally, NVIDIA has now become the only semiconductor company in history to reach a market capitalization of $2 trillion.