NVIDIA Corporation (NVDA) Is The Best Way to Play AI; Hans Mosesmann Angles for a 3Q Beat-and-Raise Tonight

Rosenblatt: Nvidia's datacenter segment will see robust growth on back of new Volta GPU momentum.


Rosenblatt analyst Hans Mosesmann is betting Street-wide attention is peeled to NVIDIA Corporation (NASDAQ:NVDA) and its datacenter segment tonight, as the semiconductor player stands to show off a strong third quarter performance, with the NVDA team likely to boost its guide.

In a confident earnings preview, the analyst maintains a Buy rating on NVDA stock with a price target of $180, which implies a close to 14% downside from current levels. (To watch Mosesmann’s track record, click here)

For the third quarter, the analyst projects datacenter will see an 88% year-over-year rise in sales, as well as roughly 8% quarter-over-quarter gains thanks to the new Volta GPU ramp.

Mosesmann anticipates, “We expect Nvidia the AI machine to deliver beat-and-raise class October quarter results tomorrow after the market close. The question for investors is will a beat-and-raise lead to profit taking after 35% share run in the last quarter or take the shares to a new level. We suspect that shares will work in that there is really only one way to play the AI theme in technology and NVDA is it.”

Glancing ahead, the analyst remains unfazed by Nvidia’s rivals, concluding: “From a competitive standpoint Nvidia continues to have limited near or even mid-term threats given that Intel’s Xeon Phi roadmap is in flux with ‘co-processor’ versions canceled this summer and the Aurora supercomputer redesign, Intel’s highly anticipated Nervana AI chip this year will not go to production (a 2nd version needs to be developed), Google’s TPU relevant only to TensorFlow frameworks, FPGAs are viable in inference but still niche, and AMD’s Instinct is for now a longer term effort to play out.”

A lot of bulls are in Mosesmann’s camp when it comes to backing an investment in this chip giant, as TipRanks analytics exhibit NVDA as a Buy. Based on 25 analysts polled by TipRanks in the last 3 months, 15 rate a Buy on Nvidia stock, 8 maintain a Hold, while 2 issue a Sell on the stock. The 12-month average price target stands at $185.91, marking an 11% downside from where the stock is currently trading.