Piper Sandler analyst Harsh V. Kumar reiterated an Overweight rating on Nvidia Corp (NASDAQ:NVDA) with a price target of $620.

Kumar made NVDA his top large-cap pick (previously Advanced Micro Devices, Inc (NASDAQ: AMD)). Valuation is now substantially more compelling than AMD, the analyst writes.

NVDA provides the entire stack of computing that allows for solid efficiencies and significant competitive advantages at the system level. Kumar noted that software licenses can be a substantial portion of overall revenue going forward and increase NVDA's TAM. 

While Kumar noted that FY25 is not fully booked, NVDA has good visibility into FY25 through a strong backlog and demand tailwinds. 

He also noted a new China chip contributing to revenues by the April quarter in the range of $2.5 billion - $3 billion per quarter once fully ramped.

The analyst writes that AMD remains a premier player in the computing space, with numerous tailwinds going its way. When compared, NVDA offers a much more compelling multiple at these levels. 

Finally, NVDA provides the more "complete" stack for accelerated computing with AI Enterprise set to be the de-facto operating system for all things gen AI.

For Nvidia, Kumar projected Q4 revenue and EPS of $20.09 billion (consensus $20.05 billion) and $4.49 in line with the consensus.

Price Action: NVDA shares traded lower by 2.91% at $453.96 on the last check Monday.