This past earnings season, chip makers duked it out in the data-center arena with Advanced Micro Devices Inc. Its Mercedes-Benz partnership, its Omniverse simulation and collaboration platform, cloud-gaming platform GeForce Now, and eventually the AI platforms of Base Command and Fleet Command as drivers for the software play. The analyst cited Nvidia’s AI Enterprise platform in partnership with VMware Inc.
“We believe the company’s software investments are at an inflection point where we see $4B+ in incremental software revenues into the 2025 time frame,” Muse said. “We compared Nvidia’s competitive moat, growth metrics, and margin profile to software companies rather than traditional semiconductor companies – with striking similarities leading us to suggest that Nvidia is more accurately compared with the software group, thus supportive of a sustainably higher multiple,” Muse, who has an outperform rating on the stock, wrote. Muse raised his price target to $250 from a split-adjusted $187.50 the week before the earnings report, and hiked his 2025 earnings-per-share estimate to $7.50 from $6.25 on one word: Software Muse, however, sought to change the conversation heading into the earnings.
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