Nvidia Corporation Benefits From AI Alliance

After hosting the CEO of new NVIDIA Corporation (NASDAQ:NVDA) collaborator H2O in New York, top analyst Vijay Rakesh at Mizuho highlights exciting potential in deep learning and artificial intelligence. For any who had execution apprehensions regarding cloud data porting, the analyst is encouraged by the alliance between the tech companies, with H2O introducing Driverless AI, “a true unsupervised learning platform” that pairs Nvidia’s DGX-1 platform and Volta 100 GPUS for rapid-fire performance. It is hardware that “is already seeing substantial traction,” praises Rakesh, who commends the platform’s speed that races 15 to 35 times quicker compared to CPUs and past GPUs alike in both linear modeling as well as gradient boosting.

In reaction, the analyst reiterates a Buy rating on shares of NVDA with a $170 price target, which represents a 2% increase from where the stock is currently trading. (To watch Rakesh’s track record, click here.)

Rakesh notes, “H2O is one of the leaders in deep learning/AI, and in many ways the tip of the spear in democratizing AI across multiple industry verticals. There are ~14,000 companies now using the H2O platform including ~169 of the Fortune 500 companies across healthcare, insurance and retail.”

Moreover, “New Driverless AI with NVDA DGX seeing solid traction as it provides visualization and interpretation while also enabling 35x performance on linear modeling and gradient boosting. The DGX-1 with the Driverless AI platform enables faster Experiments on multiple Caffe, GOOG models/ frameworks in the background, potentially using NVDA’s containerized software to compare models/platforms to derive the fastest, most efficient training model with the highest predictability precision score and visual interpretation,” elaborates the analyst.

Ultimately, Rakesh remains staunchly bullish on this chip giant’s prospects as well as on the strength of its partnerships, concluding, “NVDA and its partners drive scalable DL performance across multiple industry verticals building a broader GPU moat and a smarter predictive and intelligent enterprise driven by DL/AI.”

TipRanks analytics exhibit NVDA as a Buy. Out of 26 analysts polled by TipRanks in the last 3 months, 15 are bullish on Nvidia stock, 9 remain sidelined, and 2 are bearish on the stock. With a loss potential of nearly 10%, the stock’s consensus target price stands at $149.17.

Western Digital Gets a Win

Point for Court Western Digital Corp (NASDAQ:WDC) in the company’s legal flurry against Toshiba Corp, says the California Superior Court, and Rakesh considers this a “near-term win.” On Friday, the court decided to uphold the disk-drive maker’s injunction against the chip maker, which is a “tipping in favor of WDC,” the analyst argues.

What this means for Western Digital is that Toshiba can neither close nor transfer its Flash JV interests into Toshiba Memory Corporation until July 28th. Toshiba can still go through with both signing contracts as well as negotiation proceedings however, “[…] which appears strange because the contracts potentially specify the memory subsidiary which could be in limbo with the court order,” the analyst notes. For now, brief press releases are all that are available to inquirers out on the Street, as the court order has been secured from the public eye.

“We believe WDC’s concern over technology/IP leakage was bolstered after a WSJ article that noted Hynix could get a stake in the chip JV, […] and a Reuters article that noted a final revised WDC bid on June-27 from WDC matched the bid from Bain-SK Hynix consortium […] We believe both potentially bolster WDC’s contention that it had a fair argument,” explains the analyst, finding the win justified.

Furthermore, “Also, we believe a look at some of the July-7 court documents show WDC ‘potentially’ being blocked from the Yokkaichi Fab6 JV to pressure it to waive its JV consent rights. We believe that commentary, along with potentially constrained 2H17 3D-NAND capacity and JunQ NAND up 5% q/q are positive for WDC and MU,” argues Rakesh, who on back of Friday’s victory for the disk-drive maker reiterates a Buy on the stock with a price target of $105, which represents an 11% increase from where the shares last closed.

TipRanks analytics demonstrate WDC as a Strong Buy. Based on 22 analysts polled by TipRanks in the last 3 months, 20 rate a Buy on Western Digital stock while 2 maintain a Hold. The 12-month average price target stands at $120.00, marking a 27% upside from where the stock is currently trading.

Qualcomm: A Share-Gaining, Attractive Stock with Limited Downside

With QUALCOMM, Inc. (NASDAQ:QCOM) set to deliver its third-quarter financial earnings on July 19th after the bell tolls, the analyst is angling for prospective upside from Apple catch-up payments and as the chip giant’s NXPI acquisition heads into the finish line a.k.a. the back half of the year. In a quarterly results preview, the analyst is bullish on Qualcomm, reiterating a Buy rating on shares of QCOM with a $65 price target, which represents a close to 14% increase from current levels.

Ahead of the third-quarter print, the analyst projects revenue to reach $5.2 billion in revenue, $0.80 in EPS, and 60.5% in gross margin. For the fourth quarter, the analyst forecasts $5.4 billion in revenue, $0.88 in EPS, and 60.5%, less bullish than consensus expectations calling for $5.5 billion in revenue, $0.94 in EPS, and 61.9% in gross margin.

Rakesh likewise offers insight behind Qualcomm’s newest complaint against Apple, outlining, “On Monday, QCOM announced it is filing a complaint […] with the U.S. ITC on Apple infringement of six QCOM patents that, among others, enable: 1) better battery life, 2) rich visual graphics, 3) high speed data, and 4) faster boot. The injunction aims for the ITC to file a LEO (Limited Exclusion Order) to bar importation of the iPhones that violate patents that are not FRAND (something that would not have stood in court). QCOM expects the ITC investigation to commence in August and tried only next year as it tries to pressure Apple.”

Overall, the analyst believes investors will be happy when the earnings dice roll, contending, “We are looking for an inline JunQ/SepQ guide, with potential for upside on any catch-up payments from Apple or the ~$150M held up license payments, combined with an NXPI close in 2H17. We believe at current levels, QCOM is trading at ~10x its combined NXPI EPS (with no Apple IP contribution), which we see as attractive, with limited downside, as it continues to drive share gains in the China handset market.”

TipRanks analytics indicate QCOM as a Buy. Out of 17 analysts polled by TipRanks in the last 3 months, 7 are bullish on Qualcomm stock while 10 remain sidelined. With a return potential of nearly 10%, the stock’s consensus target price stands at $62.32.