As the international Consumer Electronics Show (CES), a global tech watering hole that convenes every year to unleash next-gen innovations to the market, takes off for 2018, FBR analyst Craig Ellis sees reason to gain confidence in NVIDIA Corporation (NASDAQ:NVDA).
With a promising auto platform growth outlook for the long-term and upside opportunities in play, the analyst reiterates a Buy rating on NVDA stock with a $270 price target, which implies a just under 23% upside from current levels. (To watch Ellis’ track record, click here)
After having met with the chip giant’s Senior Director of Automotive Danny Shapiro as well as its Investor Relations (IR) department, “digging deeper into Sunday Night’s Auto Platform Group Announcement details,” the analyst notes, “Elsewhere at the show, tier-1 partners such as Mercedes Benz made important product announcements featuring NVDA solutions. […] In aggregate these enhance confidence in the segment’s intermediate and long term growth potential and upside prospects to our existing F20/21 segment revenue modeling. We are therefore reiterating incrementally more positive on the stock,” writes Ellis, saying this chip giant’s shares “are well suited for growth investors.”
Confident sentiment is bolstered in more ways than one for Ellis, who points to the now-sampling Xavier platform that leaves him “encouraged with color around the breadth of 1Q18’s sampling activity.” As far as the analyst assesses the bigger silicon picture, this chip player is primed for solid initial reception when taking under account a great deal of the company’s “longer standing relationships.”
What of the advanced Pegasus systems that may not see “immediate mass market uptake?” All the same, the analyst looks for the company’s alliances to start sampling the product for further advanced implementations.
Commending what will yield positive long-term implications in Data Center, Ellis underscores, “NVDA simulation capability is more robust than we initially perceived, offering greater potential value to OEM’s in automobile development. […] For example, one DGX system can simulate a vehicle driving on all paved US roads in just two days. Scaled up, this could dramatically accelerate learning cycles across car models, driving conditions, and traffic patterns.” Therefore, Ellis comes away with bullish takeaways that leave him upbeat on the auto industry’s Volta-based Tesla DGX uptake.
TipRanks highlights Nvidia as a stock that has captivated some bullish attention, but about half of the Street is not willing to take the best just yet. Out of 23 analysts polled by TipRanks in the last 3 months, 11 are bullish on Nvidia stock, 11 remain sidelined, while 1 is bearish on the stock. With a loss potential of 3%, the stock’s consensus target price stands at $214.85.