“We expect another consistent quarter with solid results. Seasonally, there is a sequential decline assumed. Similarly, our July quarter forecast reflects typical seasonality of flat to slightly down. We expect the focus of Tuesday’s call to be centered around the datacenter, and more specifically Artificial Intelligence (AI) even though this segment is only expected to represent ~16% of FY:18 sales in our model,” Alger stated.
On the earnings call, the analyst expects management to focus on overseeing the growth of AI, including machine learning and deep learning. “We share NVIDIA’s enthusiasm for the space, as we see enormous leverage being applied to big data analytics in the form of various AI processes. The net result is we see the servers/ machines evolving from crude tools to augment human thought to self-evolving cognitive elements that on their own will deliver an accelerating development process that is going to enable unseen gains in productivity and discovery,” the analyst added.
Alger reiterates a Hold rating on NVIDIA shares, with a price target of $120, which implies an upside of 16% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Alger has a yearly average return of 25.3% and a 57% success rate. Alger has a 137.8% average return when recommending NVDA, and is ranked #164 out of 4561 analysts.
Out of the 34 analysts polled by TipRanks (in the past 12 months), 17 rate NVIDIA stock a Buy, 12 rate the stock a Hold and 5 recommend to Sell. With a return potential of 6%, the stock’s consensus target price stands at $109.93.