June 3 - Shares of Nvidia (NVDA, Financial) climbed about 3% Tuesday morning after Jefferies named the chipmaker a top stock pick and projected profit margins could hit as high as 80% this year.
Jefferies analyst Blayne Curtis added Nvidia to the firm's “highest conviction” list, citing the ramp-up of next-generation Blackwell chips. In his view, mounting demand for Blackwell is poised to drive a significant margin expansion.
Currently, Nvidia's gross margins sit near 61%, but Jefferies predicts they could leap toward 80% as Blackwell volumes accelerate. Margins at that level are rare in hardware, underscoring Nvidia's robust pricing power and market position.
The firm says Nvidia has evolved beyond selling standalone chips, emerging as a comprehensive AI infrastructure provider. Customers ranging from hyperscale datacenters to hedge funds are lining up for its combined hardware, software, and systems offerings. Continuous software licensing and large-scale deployments are expected to bolster profitability as AI workloads proliferate.
