By Sam Boughedda
Piper Sandler analysts raised the firm's price target on NVIDIA (NASDAQ:NVDA) to $300 from $275 per share, maintaining an Overweight rating on the stock in a note Wednesday, telling investors the company has created a "tremendous TAM opportunity."
The analysts explained that they analyzed Nvidia's software business and examined the "3 strategic pillars" of the software franchise, namely AI Enterprise, Omniverse, and DRIVE.
As a result, Piper Sandler believes Nvidia has single-handedly created a TAM opportunity between its hardware and software businesses.
"In total, the software verticals shake out to over a third (>$300B) of NVDA's $1T TAM," wrote the analysts. "In our view, the software businesses are highly value added to NVDA's customers and also likely higher growth with more profitability metrics."
"Each of the 3 strategic software businesses help customers transition into new transformative areas that drive either revenues or dramatic levels of cost savings," added the analysts. "For example, within Omniverse, BMW has been running a digital factory for 2 years, which has improved efficiencies and driven cost savings. Examples such as BMW's case give us confidence that Nvidia's AI solutions will continue to penetrate the enterprise market."