Oppenheimer analyst Rick Schafer recently had the opportunity to chat with NVIDIA Corporation’s (NASDAQ:NVDA) CFO Colette Kress and IR Manager Shawn Simmons on his 15th Annual Semiconductor Bus Tour. While Schafer cheers NVDA’s transition to a platform solutions provider leveraged to some of the most attractive secular growth themes in the semiconductor space, the analyst remains sidelined on shares as he sees risk-reward as “fairly balanced” at current valuation.
Schafer wrote, “The tone of the meeting was notably bullish as the GPU giant benefits from its platform approach and leadership in Artificial Intelligence. Management remains confident the company is well ahead of the competition in AI training acceleration as ASICs FPGAs and competing GPUs appear better suited to inference applications. Ms. Kress expects continued secular growth from AI as evidenced by NVDA’s DC segment’s ~3x Y/Y growth in F1Q (Apr). NVDA’ longer-term datacenter TAM is ~$30B TAM, half from the company’s greenfield inference opportunity. While the lionshare of automotive is infotainment today, management expects autonomous driving will begin to impact the model as soon as 2019. Management is working with over 200 partners today as it looks to be a thought-leader in the space, similar to its position in DC/cloud AI.”
Schafer reiterates a Perform rating on Nvidia shares, without providing a price target.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Rick Schafer has a yearly average return of 17% and a 72% success rate. Schafer is ranked #60 out of 4578 analysts.
Out of the 35 analysts polled in the past 12 months, 18 rate Nvidia stock a Buy, 12 rate the stock a Hold and 5 recommend a Sell. With a downside potential of 16%, the stock’s consensus target price stands at $127.70.