At least eleven brokerages hiked price targets on the company's stock. Brokerage Cowen & Company was the most bullish, raising its target by $85 to $325, higher than Wall Street's median price target of $285.15 and Friday's pre-market price of around $287.
Analysts at Susquehanna said while they had expected the company to beat market consensus expectations thanks to the data centre demand, they had never expected this kind of upside.
"Nvidia's dream-a-dream AI story is solidly back on track," analysts from the brokerage said in a note to clients.
Chipmakers have had a rollercoaster ride over the past two years, with Donald Trump's trade war with China and the fading of a boom in mobile phone development and sales eating into growth. New markets in self-driving cars, internet of things appliances and the huge data centres needed to drive booming e-commerce and new online functionality, by contrast, are still developing.
Sales from Nvidia's data centre business, which serves clients developing products related to artificial intelligence, surged 43% in the fourth quarter to $968 million. Jefferies analysts projected a 34% jump overall this year.
The chipmaker also forecast first-quarter sales above estimates, even as it expected a $100 million hit from the coronavirus outbreak. The strong forecast also helped fuel expectations of a rebound in chip demand.
"With solid product cycles in Gaming and sustainable strong demand from Data Center customers, we continue to see an upward bias in revenues, margins, and earnings as we move through FY21," J.P. Morgan analysts wrote in a note.
Nvidia was the second chipmaker after Qualcomm Inc to warn of the potential impact on its business of the coronavirus outbreak, which has left Chinese companies struggling to restart production after an extended new year holiday.
Cowen analysts said Nvidia was also benefiting from pent-up demand following under-investment from cloud customers in the first half of 2019 and accelerating demand for conversational AI - where computers engage in human-like dialogue.
(Reporting by Akanksha Rana in Bengaluru)